Spain to extend government car subsidy scheme

MADRID, July 19 Fri Jul 19, 2013 8:50am EDT

MADRID, July 19 (Reuters) - Spain said on Friday it would extend a scheme to subsidise purchases of new cars which has tempered the fall in car sales in the recession-hit country.

Deputy Prime Minister Soraya Saenz de Santamaria said the government would soon pass a decree to add 70 million euros to the scheme after an initial 150 million euros ran out.

Under the scheme, people who scrap their old car and buy a new one get a rebate of 2,000 euros, half from the government and half from the carmaker.

Car manufacturers' association Anfac welcomed the move which, it said, would boost the Spanish economy.

The scheme has helped sales to individuals but failed to offset the decline in sales to companies. Spanish car sales, which have been on a downward trend for the last four years, fell 0.7 percent year-on-year in June.

That compares to a 6.3 percent fall in overall European car sales last month which made it the worst June since 1996 and left volumes at a 20-year low in the first half of this year.