New-car sales improved in both France and Spain in June, thanks to government scrappage incentives. French new-car sales rose 7.1 percent in June from a year earlier and in Spain the rate of sales decline eased to 15.9 percent last month from 38.7 percent in May.
In Spain, economists said that the economy could be showing signs of hitting the bottom of its deep recession, but industry associations in both countries worried sales could slump again once the scrappage incentives end.
As of mid-June, around 200,000 new-car registrations in France, or 20 percent of the total, were linked to a scheme offering cash payments for traded-in old vehicles, Xavier Fels, president of industry group CCFA, told a press conference.
Industry groups in both countries warned of renewed pain when subsidies run dry around the end of the year.
"We're still a long way from the end of the year (when the scheme is due to end)," said Fels, "and everyone is conscious of (the issue). We're sending the authorities a message of caution and it's up to them to decide the best way to play it."
The Spanish government does not have much finance in reserve to extend consumer incentives.
In France, PSA/Peugeot-Citroen saw a 12.7 percent increase in sales in June, with the Citroen brand posting a 15.1 percent rise and Peugeot branded vehicles up 10.5 percent.
Renault group sales rose 10.3 percent in June, with Renault brand sales up 5.6 percent and Dacia sales rising 87.7 percent.
Source: Automotive News Europe
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