European new car sales are expected to fall by two percent in 2020, their first decline in seven years, the industry trade association said Wednesday as it urged

governments to aid a transition to greener vehicles.

With the EU launching its "Green Deal" to make the bloc's economy carbon neutral, the European Automobile Manufacturers’ Association (ACEA) said it hopes the plan will strengthen the industry's ability to compete and boost the uptake of zero-emission vehicles.

"This is all the more important as we are about to face a shrinking market," said Michael Manley, who is the head of FCA Chrysler and leads the ACEA.

The ACEA forecasts that, after six consecutive years of growth, EU passenger car sales will drop by two percent in 2020.

"At the very time when our industry is massively stepping up investments in zero-emission vehicles, the market is set to contract –- not only in the EU but also globally –- so the transition to carbon neutrality needs to be very well managed by policy makers," a statement quoted Manley as saying.

The ACEA called for the construction of a dense network of charging points and re-fuelling stations suitable for cars and commercial vehicles.

"This is one of the single most important enabling conditions for achieving carbon neutrality," said the ACEA.

It also called for "consistent and economically-sustainable incentive schemes for users of both cars and commercial vehicles" to ensure that higher prices for zero-emission vehicles doesn't dampen sales.

The European Commission unveiled last week a one-trillion-euro ($1.1-trillion) plan to finance its goal of making the bloc carbon neutral by 2050.afp