Car production was down 30.5 percent to 1.3 million units in April, according to data from market researcher J.D. Power Automotive Forecasting. Output has fallen by 35.9 percent to 4.5 million units in the first four months of 2009.
The good news is that there are signs the declines should slow.
This month Renault, PSA/Peugeot-Citroen and Nissan have announced plans to increase production in Europe.
Some automakers are boosting production to meet raising demand created by scrapping incentives. Many European countries -- including Germany, Italy, France, Spain and the U.K. -- are offering 1,000 euros to 5,000 euros to people who trade in their old cars for newer models.
Affordable subcompact and compact cars have been the big winners.
Last month, Renault increased production at subsidiary Dacia's plant in Pitesti, Romania, by 68.9 percent to 35,335 cars. During the same month, sales at of the low-cost automaker's models increased 60.4 percent, according to figures from the European auto manufacturers association, ACEA.
"Brands that are doing better from scrappage incentives are slowing down their production cuts and are now producing to meet increased demand," said Peter Cooke, professor of automotive management at Buckingham University in the U.K.
Tough time for premium brands
Premium brands are not benefiting from the subsidies as much as volume automakers.
Production of BMW brand cars was down 46 percent in April to 58,061 units, and is down 38.8 percent to 240,964 in the first four months of the year.
Daimler nearly halved production of Mercedes cars in April to 52,608.
Between January and April its production is down 46.2 percent to 197,486 units. "Over the next few months, manufacturers will reduce their production to clear inventories," said Cooke. "They want to get rid of everything they have and don't want to overproduce."