PARIS - Passenger car sales rose 12.9 percent in January in EU member states, as the ongoing effects of scrapping incentive schemes boosted demand, European carmakers' association ACEA said on Tuesday.

Governments introduced scrapping bonuses last year to boost demand and prop up carmakers hit by the downturn, leading to a limited fall in European car sales in 2009.

But carmakers are worried that 2010 will be tough, with some scrapping schemes finished and others due to run out soon. Many forecast a drop of around 10 percent in the European car market this year.

New passenger car sales rose 12.9 percent to 1,058,868 units in European Union member states in January, which had one fewer working day than in 2009. ACEA said January car sales in the European Union were down 17.3 percent versus January 2008.

The EU15 states -- or Western Europe -- saw a 15.7 percent increase in sales, while the EU10 -- the new European member states -- saw a 23.5 percent fall in registrations in January.

ACEA said car sales in the European Union, plus the EFTA countries, rose 13 percent. Data for Cyprus and Malta was not available.

Germany, Europe's largest car market and whose highly successful scrapping scheme finished at the start of September, saw sales fall 4.3 percent in January, ACEA said.

Volkswagen, Europe's largest carmaker, said last week there were challenges ahead in 2010, despite a January sales volume surge.

French carmakers PSA Peugeot Citroen and Renault last week also warned of a tough year ahead as they posted full-year results which showed widening losses.

Fiat chief executive Sergio Marchionne last week responded to news that Italy would focus incentives on boosting consumer demand on other industry sectors apart from cars by predicting carmakers would sell 350,000 fewer cars in Italy this year.

January 2010 was the first month in which ACEA published data for the EU15 and the EU10 countries separately, along with a total for the EU member states plus EFTA countries. Previously it had published separate data only for Eastern Europe and for Western Europe plus the EFTA countries.

(Reporting by Helen Massy-Beresford; Editing by Dan Lalor)

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