European car sales decline

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.
-- French July car sales drop 12.9pc
-- Italian sales down 26 percent, Belgium's up 9.5pc
-- Japan car sales still strong before govt subsidies end
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. 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.
Italy's new car sales were down 25.97 percent to 152,752 units, according to Transport Ministry data. Fiat's sales were off 35.8 percent. Belgian new car sales were up 9.5 percent to 39,309. European carmakers published strong quarterly results last week as swelling underlying demand offset the end of scrapping schemes. Some companies voiced concerns about the rest of the year and 2011, with austerity measures set to hit car demand.
France's PSA Peugeot Citroen, Europe's second-largest carmaker, warned the economic environment would get tougher in the second half. Volkswagen, Europe's biggest carmaker, said it was confident about the second half. But it said the "dynamic" sales and earnings growth it saw in the first half "will not continue undiminished." US car sales are due out on Tuesday.