Spain to extend new-car subsidies into 2010
Spain is extending its subsidies for new-car purchases -- credited with reversing a slump in sales -- for the rest of this year and into 2010, Industry Minister Miguel Sebastian said Saturday.Madrid - Spain is extending its subsidies for new-car purchases -- credited with reversing a slump in sales -- for the rest of this year and into 2010, Industry Minister Miguel Sebastian said Saturday.
The government will provide an extra EUR 40 million (USD 60 million) for the programme, making it easier for consumers to buy an additional 80,000 vehicles, Sebastian told a news conference.
"The budget for 2010 sets aside an envelope of cash which allows the programme to be prolonged in 2010," he said.
Under the so-called Plan 2000E introduced in June, car buyers in Spain get a 500-euro subsidy from the central government, another EUR 500 from their regional government and EUR 1,000 from the auto maker when buying a new car.
The measure -- similar to others in several European countries -- had an initial budget of EUR 100 million which, Sebastian said, is almost completely used up.
It is part of a wider package of stimulus measures introduced by Socialist Prime Minister Jose Luis Rodriguez Zapatero to revive the Spanish economy, which the International Monetary Found predicts will shrink by 0.7 percent next year after contracting 3.8 percent in 2009.
New car sales plunged 28 percent in 2008, the biggest-ever annual decline as the country slid into its first recession in 15 years due to the impact of the international financial crisis on an already weakened building sector.
But new car registrations in Spain leapt 18 percent in September on a 12-month basis to 77,374 units, the first increase for 16 months as the government incentives spurred sales.
"The plan has been a resounding success which has turned the market around," said Sebastian.
Spain's auto manufacturing sector is the third-biggest in Europe, although it has no national automaker except Seat, which is owned by Germany's Volkswagen.
It is also a major exporter, with its 18 factories belonging to some of the world's biggest automakers.
The auto industry accounts for about six percent of Spain's economic output and 15 percent of exports.