Spain renews, extends car-scrapping scheme to aid recovery of economy
By Katell Abiven, AFPMADRID--Spain will renew a bonus scheme for drivers to trade in their old cars to boost a sector that is helping drive an economic recovery, the government said on Thursday.
October 19, 2013, 12:42 am TWN
“We are going to extend the scheme with a further 70 million euros” (US$95 million), Budget Minister Cristobal Montoro told an industry forum in Madrid.
The bonus scheme was launched in October 2012 and has already been renewed three times.
Spain is Europe's second-biggest automaker, building nearly 2 million cars a year, but 90 percent of them are exported, with home sales weak after a double recession.
The government says exports are one of the keys to the recovery that appears to be starting in the Spanish economy.
“In Spain, the number of cars sold is subnormal. Consumption is low in our country and that is about confidence,” Montoro said.
“We can and must support domestic car-buying,” he said, adding that automaking is “a leading sector for getting out of the crisis.”
He forecast sales of 700,000 cars in Spain this year, compared to 1.7 million in 2007 just before the economic crisis struck.
Mario Armero, vice-president of the carmakers' association ANFAC, said automaking accounts for one in every four euros of Spain's industrial output and 10 percent of the economy overall.
The number of models of vehicle made in Spain has risen from 34 in 2011 to 40 currently and is likely to be 45 in two years, he added.
Vehicle production in Spain employs 250,000 people and created 2,400 jobs in the first half of this year, he said.