New Car subsidy to end by June 2010

 

The Subsidy available on new cars, introduced by the Spanish government in June 2009, and has been credited with reversing a slump in sales, will expire in mid-2010 and will not be renewed, the industry minister said Monday.

If sales of new vehicles continues at the same rate, then the amount allocated will be reached in June and as such "there is no plan to continue," Miguel Sebastian told a news conference, going on to mention "Plans to help purchases only work if they are provisional, because otherwise it's not a stimulus."

The incentive, know as ‘Plan 2000E', was introduced in June of last year, where new car buyers receive a 500-euro subsidy from the central government, another 500 euros from their regional government and a further 1,000 euros from the manufacturer of the vehicle .

The measure is similar to others in operation throughout Europe and had an initial budget of 100 million euros.

Sales of new cars rose by 37% in November compared to the same period last year according to a recent report this month saw the third straight monthly increase, as a result of this subsidy.

The sale of new cars fell by 28% in 2008, the biggest-ever yearly decline as the country slid into its first recession in 15 years due to the impact of the international financial crisis on an already weakened building sector.