Europe car sales drop in July as govt aid phases out

Spanish, Italian and French car sales dropped in July from a year ago as scrappage schemes were phased out and austerity measures kicked in, figures showed on Monday.

In Spain, industry association ANFAC warned of a tough second half for car sales as government subsidies ended and after a value-added sales tax hike from July 1.

Carmakers are bracing for a slide in demand in the second half of the year as other scrappage schemes end and austerity measures lead consumers to hold off on big-ticket items like cars.

New car sales in Japan rose for the 11th straight month. South Korea's Hyundai Motor Co reported a double-digit rise in global sales in July but a slowdown looked certain as government subsidies end.

July sales give the first indication of how the second half has got under way.

French new passenger car registrations fell 12.9 percent to 169,804 in July, the CCFA carmakers' association said in a statement. The industry scrapping bonus was reduced further to 500 euros as of July 1 from 700 euros.

"The big impact of the scrappage scheme is beginning to ease off. But it's a slow easing, not the same as in Germany, which is more positive," said a spokesman for CCFA, the French industry association.

Renault Chief Operating Officer Patrick Pelata said on Friday he expected to see a double-digit percentage drop in July European car sales, while Renault's own sales should be down 5 percent to 6 percent in the region.

STRONG QUARTERLY RESULTS

Spanish new car sales fell 24 percent from a year ago to 82,167 units in July, ANFAC said. They are seen dropping more than 30 percent in the second half.

Full story