Portugal car sales leap 39 percent in 2010

Lisbon–Portuguese new car sales leapt 39 percent last year to hit a five-year high level as consumers rushed to purchase a vehicle before a tax increase took effect, the ACAP auto association reported in January.

Sales rocketed by 62 percent in December because consumers sought to benefit from government-funded sales incentives before they expire and beat the 2011 tax rise, ACAP said. This took the total of vehicles sold to 223,491 for all of 2010.

“This increase in the market is essentially due to …a significant increase in the tax burden in 2011, and as a consequence an anticipation in demand,” the auto association said in a statement.

As part of an austerity programme to correct public finances, the Portuguese government put an end to a “cash for clunkers” car sales incentive programme, raised the VAT sales tax by two points to 23 percent, and increased taxes on new vehicles.

The Portuguese government has adopted radical measures to reduce the country’s public deficit from an expected 7.3 percent of gross domestic product (GDP) in 2010 to 4.6 percent in 2011.

AFP / Expatica / Erin Russell Thiessen