Sales of new cars in Spain increases during Feb

Car sales rose sharply in France, Italy and Spain in February as scrappage programs lifted business, but European carmakers are set to face tougher times ahead as governments phase out incentives.

Scrapping programs, which encourage new car purchases by paying cash bonuses when old models are traded in for new ones, limited the fall in European car sales last year to 1.6% despite a savage industry crisis.

In February new car registrations in Spain, Italy and France were boosted by incentives, with drivers flocking to showrooms to take advantage of the programs before they evaporate.

"The really low level of orders is an indisputable sign of the terrible conditions the Italian auto market is facing in the coming months," Italian foreign car makers association UNRAE said on Monday, adding that orders in February slumped almost 35% from last year.

UNRAE said it expects orders in 2010 to close with around 1.5 million contracts, down sharply from 2.35 million in 2009.

Industry think-tank Promotor said the order portfolio from last year meant March sales would be reasonable; but it added "as of April registrations should see very significant falls. The Italian car market is heading for a black spring ... and 2010 should see a fall in sales of around 20%."

Spanish carmaker association ANFAC said on Monday that while the continuation of government subsidies had had a positive influence on sales in February, 2010 figures would roughly be in line with those in 2009.

French carmakers' group CCFA said February registrations continued the rise seen in January as consumers had rushed to order cars at the end of last year before the scrappage program was phased out. The group said it was uncertain about the latter part of the year.

"We know that the first half will be good but there is still uncertainty over the end of the year," CCFA spokesman Francois Roudier said.

Carmakers and suppliers reporting full-year results in recent weeks have warned of an uncertain outlook for 2010, as underlying economic recovery is expected to be offset by a negative impact from the end of scrapping programs.

Last week Daimler AG Chief Executive Dieter Zetsche, speaking in his role of head of European carmakers' association ACEA, said that European carmakers did not expect a quick recovery this year.

Renault Chief Executive Carlos Ghosn told Reuters Insider on Monday that the European car market would shrink by 10% this year.

Automobile sales in Japan, excluding 660cc minivehicles, rose 35.1% in February from a year earlier to 294,887 vehicles, the Japan Automobile Dealers Association said.

TOYOTA SALES HOLD

Toyota Motor Corp, which has been struggling with a string of vehicle recalls, did not see any major impact on its sales in February from the episode. That could be because the data are based on sales that largely took place before Toyota made the recalls.

Toyota has recalled more than 8.5 million cars globally for unintended acceleration and braking problems.

In Italy, Toyota brand sales in February rose 3.2% on the year to 7,006 vehicles while in Spain the brand sold 4,972 in February and 9,178 in the first two months. However, in France, Toyota plus Lexus sales fell 8.7% in February from a year earlier.

U.S. February car sales figures are due out on Tuesday and are expected to show that Toyota's likely took a hit from massive recalls. The bulk of the recalls have been there.