French and Spanish car sales plunged in October as Spain continued to suffer from the end of a scrappage scheme and France's reduced subsidy was not enough to prevent a drop versus the strong sales this time last year. The subsidies launched to encourage drivers to trade in old cars were highly successful but carmakers are now facing tough comparisons with the booming sales last year when schemes boosted sales.
Spain's car scrappage scheme ended at the start of July, coinciding with an increase in value-added tax. Spanish car sales fell 37.6 percent year-on-year in October following a 26.9 percent drop in September, industry association ANFAC said. France still has a 500 euro ($697) scrapping bonus in place until the end of the year. Sales fell 18.7 percent in October to 171,449 units. Over the first 10 months passenger sales fell 1.4 percent in France.
In Germany, Europe's biggest car market, new car registrations continued to shrink in October, after falling almost 18 percent in September, a source familiar with the figures told Reuters. Germany's scrappage scheme ended at the beginning of September last year.
European carmakers are increasingly relying on fast-growing emerging markets to boost their sales. On Monday South Korean and Indian carmakers posted strong October sales, but their Japanese counterparts saw double-digit declines in domestic sales. In France, "(October) was bad, but we were expecting it because we are starting to enter the period in which 2009 saw its figures inflated by the scrapping incentive," said a spokesman for industry association CCFA.