Sales of new cars in the EU dropped 9.3% in May as the effects of government assistance for the automotive industry slipped away and the economic environment remained challenging, according to industry association ACEA.
Governments assisted car manufacturers with scrapping incentive schemes that increased demand for new cars, but these have either finished or are running out and car manufacturers are concerned about the 2nd half of the year.
ACEA stated the May decrease to a total of 1,129,508 units registered was the 2nd month-to-month decrease in 2010 and reflected "the end to government support schemes on the one hand and the further challenging economic situation on the other."
In the 1st 5 months new car registrations in the EU were down 1.9%.
Europe's largest car market, Germany whose Umweltprämie scrappage scheme finished in September 2009, witnessed a 35.1% drop in registrations. France, whose scheme is being phased out gradually, saw an 11.5% year-on-year decrease in May.
Spain however, whose scheme is still in place, saw a 44.6% increase in May, compared with a low comparison in 2009.
The head of French carmaker PSA/Peugeot-Citroen, Philippe Varin, said earlier this month that he expected the European car market to shrink around 9 percent in 2010.
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