Spanish car sales fall in July

Spanish and French car sales dropped in July from a year ago as scrappage schemes were phased out and austerity measures kicked in.

In Spain, industry association ANFAC warned on Monday of a tough second half for car sales as government subsidies ended and after a VAT sales tax hike from July 1.

Carmakers are bracing for a slide in demand in the second half of the year as scrappage schemes end and austerity measures lead consumers to hesitate before buying big-ticket items like cars.

New car sales in Japan rose for the 11th straight month and South Korea's Hyundai Motor reported a double-digit rise in global sales in July but a slowdown looked certain as government subsidies end for the sector.

July sales give the first indication of how the second half has got underway.

Spanish new car sales fell 24 percent from a year ago to 82,167 units in July, ANFAC said. They are seen dropping over 30 percent in the second half.

French new passenger car registrations fell 12.9 percent to 169,804 in July, the CCFA carmakers' association said in a statement, as the industry scrapping bonus was reduced further to 500 euros as of July 1 from 700 euros previously.

Renault Chief Operating Officer Patrick Pelata said on Friday he expected to see a double-digit percentage dip in July European car sales, while Renault's own sales should be down 5 to 6 percent in the region.

European carmakers published strong quarterly results last week as swelling underlying demand offset the end of scrapping schemes. However, 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 said the "dynamic" sales and earnings growth it saw in the first half "will not continue undiminished."

Italy and Belgium will publish car sales data later on Monday and U.S. car sales are due out on Tuesday.