New Car Sales in Spain Increase in August Before Tax Hike image

For the first time in the past seven months, Spanish new-car sales increased in August.

Car manufacturers’ association ANFAC announced that the increase is due to the fact that customers tried to acquire a new car before the increase in value added tax. In August car sales were up 3.4% to 48,820 units, the first increase since January. The rise came before the rise in VAT of three percentage points to 21% beginning September 1st.

ANFAC announced that 10,000 private customers purchased cars before the tax rise.Although car sales rose in August, the overall trend from January to August was down 8.5%, and things are expected to get worse.
“The last part of the year, especially September and October are going to be a disaster. We are going to see a sharp fall unless sellers hold the sector up by making aggressive offers,” said a spokesman for car distributors’ association Faconauto.

According to ANFAC, during the first eight months of the year 520,216 vehicles were sold and it expects a total of no more than 700,000 to be sold by the end of the year. Monday, August 3rd, French industry group CCFA announced that new car sales in France dropped for the 10th straight month, with 11.4% in August.