* French car sales down 18.7 percent in October
* Spanish car sales fall 37.6 percent in October
* German car sales continued to fall in Oct - source
* Italy car sales fall 28.82 percent in October
(Adds Belgian, Italian data, analyst comment)
By Robert Hetz and Helen Massy-Beresford
MADRID/PARIS, Nov 2 (Reuters) - French and Spanish car sales plunged in October as Spain continued to suffer from the end of a scrappage scheme and France's reduced subsidy was not enough to prevent a drop versus the strong sales this time last year.
The subsidies launched to encourage drivers to trade in old cars were highly successful but carmakers are now facing tough comparisons with the booming sales last year when schemes boosted sales.
Spain's car scrappage scheme ended at the start of July, coinciding with an increase in value-added tax. Spanish car sales fell 37.6 percent year-on-year in October following a 26.9 percent drop in September, industry association ANFAC said.
France still has a 500 euro ($697) scrapping bonus in place until the end of the year. Sales fell 18.7 percent in October to 171,449 units. Over the first 10 months passenger sales fell 1.4 percent in France.
In Germany, Europe's biggest car market, new car registrations continued to shrink in October, after falling almost 18 percent in September, a source familiar with the figures told Reuters.
Germany's scrappage scheme ended at the beginning of September last year.
European carmakers are increasingly relying on fast-growing emerging markets to boost their sales. On Monday South Korean and Indian carmakers posted strong October sales, but their Japanese counterparts saw double-digit declines in domestic sales.
Italian car sales fell 28.82 percent in October, to 139,740 units, according to the Transport Ministry. Reuters calculations showed Fiat had a 27.47 percent market share last month, below its target of 30 percent.
"Only in the major crisis of 1993 and in the darkest period of the current crisis -- from the end of 2008 to the beginning of 2009 -- have steeper falls been recorded," said industry think tank Promotor in a statement.
In France, "(October) was bad, but we were expecting it because we are starting to enter the period in which 2009 saw its figures inflated by the scrapping incentive," said a spokesman for industry association CCFA.
"November and December sales figures will be even worse," he said. However, the French market should see sales of over 2 million units for the full year, the spokesman added.
In 2009 the French market saw sales increase by 10.7 percent to 2.3 million units, with customers flocking to showrooms towards the end of the year in particular, to take advantage of the full 1,000 euro scrapping scheme before it decreased at the start of 2010.
Flavien Neuvy, head of the automobile industry research department at French consumer credit organisation Cetelem, said: "With the end of scrapping schemes, the French and European markets are returning to their fundamentals, and these are not dynamic."
"Drivers drive less and less, cars are more and more reliable and customers keep them longer and longer -- eight and a half years on average," he said.
"The question is no longer how the end of the year will turn out, but what 2011 will be like," he added.
In October, Europe's second-biggest carmaker PSA Peugeot Citroen saw a 17.3 percent fall in its group sales in France, while Renault group sales dropped 21.9 percent year-on-year last month.
Light commercial vehicle sales, which were not affected by the scrappage scheme, rose 15.7 percent in October and 12.7 percent in January to October in France.
In Belgium, which never had a scrappage scheme, car sales rose 9.68 percent in October.
U.S. auto sales figures are due to be released on Wednesday. ($1=.7172 Euro) (Reporting by Helen Massy-Beresford, Gilles Guillaume, Christiaan Hetzner and Robert Hetz; Editing by Hans Peters and Elaine Hardcastle)