Caution: government support can be addictive. PSA Peugeot Citroën warns that its 2009 operating loss could reach €2bn if France does not renew its cash-for-bangers subsidies, due to expire at year end. If so, Peugeot will scale down fourth-quarter production, anticipating an awful 2010. Its mutterings may be intended to press the French government to continue the plan, which offers discounts on new cars if consumers trade in old models.

In fact, France, Germany and others will almost certainly maintain such schemes into 2010 – although Germany may trim its overgenerous incentives. After all, they are having a powerful effect on spending and automotive employment. German new car sales jumped an extraordinary 40 per cent year on year in May and are up 22 per cent year-to-date. French sales increased 12 per cent in May and are down only 1.4 per cent this year. Also, the schemes’ net costs appear somewhat limited by increased value added tax receipts and reduced unemployment costs.