Western European car sales figures to be released this week will show a smaller decline in March than previous months as government incentives take effect, analysis and forecasting group Global Insight said.

European automotive industry association ACEA is due to report March car sales figures on Thursday. Individual European countries have already released their data.

Western European sales will likely be down eight per cent at about 1.429million vehicles, Global Insight estimated.

March figures also benefited from three more working days this year as Easter fell later than in 2008, the group added.

German car sales leapt by 40 per cent in March on scrapping incentives, in which the government allocates subsidies to motorists who trade in their old cars for new, less polluting models.

French car sales rose by 8.1 per cent in March.

Global Insight said Italian passenger car sales stabilised last month and the real benefit of Italy’s own scrapping scheme would be seen in April and May.

Scrapping incentives have caused some controversy.

Environmental group Greenpeace said that the schemes did not address underlying problems in the auto sector and were a waste of taxpayers’ money.

Global Insight said there was no doubt that scrapping programmes were providing relief to the beleaguered western European market.

However, it added: “They are also likely to result in a pull-forward effect which will affect sales later in the year.”

It said further job losses and continuing low consumer confidence levels would hurt the market in the second half.