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PARIS -- French new-car sales continue to be helped by the country's recently implemented CO2 tax system.

New-car sales grew by 4.5 percent during the first six months to 1.12 million units compared to the same period of 2007, according to the French automobile manufacturers association, CCFA.

Almost all growth was concentrated in the minicar and small-car segments, which increased 15 percent during the first quarter. These cars now represent 49.6 percent of all sales, CCFA said.

France's PSA/Peugeot-Citroen and Renault had a 60 percent share of those sales.

The automakers also have seven of the 10 top-selling low-emissions vehicles (those with CO2 below 120 grams per kilometer).

Small models are eligible for point-of-purchase rebates, while buyers of larger cars are more likely to be hit with a new CO2 tax that went into effect January 1.

CCFA attributed the resilience in France's new-car market to consumer reaction to the country's so-called "bonus-malus" system.

"The effects on the market of the bonus-malus system are now very clear," CCFA President Xavier Fels said. "There has been a virtuous movement away from cars that attract penalties to smaller, more environmentally friendly cars that do not."

Car buyers in France can get one-time subsidies that range from a 200 euro bonus on cars that emit less than 130g/km of CO2 to a 5,000 euro subsidy on models that have very low or no-emissions.

The penalties on high-polluting vehicles range from a 200 euro levy on cars that emit more than 160g/km of CO2 to a 2,600 euro tax on cars that emit more than 250g/km.

Cars with emissions between 130g/km and 160g/km of CO2 are exempt from the bonus-malus system.

The CCFA data shows that French consumers are increasingly sensitive to the new CO2 tax.

"There's essentially been a big 10 percent hike in sales of cars eligible for the bonus, and a small 10 percent decline in those attracting the penalties," Fels said.

CCFA officials were unwilling to comment on the potential effect of a government proposal to convert some point-of-sale CO2 taxes into an annual pollution levy on high-emission cars.

On July 1, the sustainable development ministry announced plans to enact an as-yet-undecided annual tax on cars that emit more than 250g/km starting Jan. 1, 2009.

Minister of State for Sustainable Development Jean-Louis Borloo told France daily newspaper Le Parisien that the new tax would "amplify" the bonus-malus system. "The penalties on extremely polluting cars will no longer be paid only at the time of purchase, but every year," Borloo said.

The tax hike is expected to increase tax revenues.

French officials initially said the "bonus-malus" system would be revenue-neutral, with taxes on high-emission cars supporting subsidies to more fuel-efficient models.

Government officials have been surprised by the radical segment shift, and the finance ministry now projects a 200 million euro funding shortfall by year-end.

Industry experts suggest that the shortfall could even be higher, with analysts at market research JATO Dynamics calculating that the bonus-malus system cost France 86 million euros in the first four months of 2008.