The European auto industry does not expect a quick recovery this year and warned sales of commercial vehicles that closely follow the economic cycle would "at best be flat" after dropping by one-third in 2009.

Speaking at the 2010 annual reception for the Brussels-based industry body ACEA, President Dieter Zetsche said any upswing was far from stable.

"If the economy looks better in 2010, it's only when compared with 2009. And that's why it is so critically important not to endanger whatever little stabilisation has been achieved," he said.

Zetsche, who is chief executive of German carmaker Daimler, said the auto industry accounts for 35 percent of all European manufacturing employment and nearly 380 billion euros of tax revenue.

Amid the bleak outlook for the commercial vehicles sector -- where new registrations fell more than 32 percent to some 1.71 million trucks, vans, buses and coaches last year -- Zetsche cautioned against stricter carbon dioxide (CO2) emission regulations.

"Legislation needs to be reasonable and the target level of 135 grams CO2 per kilometre for light-commercial vehicles in 2020 simply isn't. The tailpipe target system for passenger cars just won't work for light trucks," the ACEA president explained.

Zetsche said the shape of the auto industry would be transformed by the game-changing trend toward zero-emission mobility in the future and European governments needed to actively participate in the process.