Spanish car sales surge before tax rise: trade data

1st July 2010, Comments 0 comments

Car sales in Spain, where the government has launched tough reforms to correct a debt crisis, surged 25.6 percent in June on a 12-month basis, trade data showed on Thursday.

The sales data has been strong in recent months as consumers bring forward intended purchases because on this July 1, VAT sales tax rose by two percentage points.

The date also marks the end of so-called cash-for-clunkers subsidies introduced during the recession in Spain to support the auto industry.

The auto industry here expects the monthly figures for sales of new vehicles now to show falls of more than 30 percent.

This is "because of the economic situation, the fall of private consumption, restrictions on credit availability, the rise of VAT and the end of the car-scrapping scheme," said the trade association Anfac which published the data.

The figures for June showed a slowdown from a rise of 39 percent to 63 percent month by month in the last four months.

© 2010 AFP

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