New car sales plummet again - 03.09.2010

NEW car sales in Spain were down drastically in August for the second month running, following a sales-tax rise and the end of the Scrappage Scheme.

Sales fell by a whopping 23.8%, hard on the heels of July’s 24.1% decline.

 

It meant that August’s total of 44,578 new cars sold was the lowest number for that month since records began 21 years ago.

 

 

The total was down from July’s 82,167 and 58,509 in August 2009, according to figures released by Anfac, the auto-makers association.

 

 

 

Anfac blames the sharp drop on a 2% sales-tax increase, introduced on 1^st July, and the government’s car Scrappage Scheme, which had boosted sales.

 

 

 

The decline will fuel doubts about the ability of the Spanish economy, Europe’s fifth largest, to maintain its timid recovery from its worst recession in decades, when government stimulus measures end.

 

 

 

Spain’s gross domestic product expanded by an annual rate of 0.2% in the second quarter, following growth of 0.1% in the first quarter, when the country emerged from recession.

 

 

 

The country entered its worst recession in decades at the end of 2008, and the Spanish government responded by adopting one of the largest stimulus plans in Europe, based on tax cuts and industry subsidies.

 

 

 

But with the government under pressure to rein in its growing public deficit, many of these measures have ended - or are about to.