Spain to extend car subsidy to next year image

The Spanish government intends to expand the car scrappage program until the middle of next year, some sources told Reuters.

The Spanish government, facing an election in December, plans to push the car purchase subsidy program that has a major impact in boosting auto sales in the country until the middle of next year, a source at the Industry Ministry said this week. It is not the first time when Spain renews these state subsidies, a situation which happened several times in recent years. Car deliveries have grown for the past 26 months in a row due to this incentive scheme, that also contribute to an economic revival after a long period of depreciation. The subsidy program offers consumers discounts when they want to buy a new car while turning in an old one. The scrappage scheme was last extended by the government in May with a 225-million-euro – 238 million dollars – package.

It was due to expire at the end of the year, but will be extended until July 31, 2016, using leftover funds from the May package, the ministry source said. The source confirmed comments made by Industry Ministry official Begona Cristeto earlier this week and reported by the Spanish media. Even if Spain’s parliament has been dissolved ahead of the December election, cabinet ministers can still approve some measures. The car scrappage scheme is aimed to reduce the number of older vehicles on the road, improving road safety and supporting the car industry. Consumers get around 750 euros in subsidies per car from the state, in addition to similar discounts from car manufacturers as part of the scheme.

Via Reuters