The Spanish government has offered its fourth car incentives program in a year as part of its bid to boost vehicle sales. The Spanish government has already green-lighted the EUR70 million ($97 million) program, according to Deputy Prime Minister Soraya Saenz de Santamaria. The EUR1,000 subsidy is available for new cars having a price of EUR25,000 or less.
The subsidy must be matched by a discount from the dealership under the so-called "cash-for-clunkers" program. Buyers must also trade in a seven- to 10-year-old car in exchange for a more fuel-efficient vehicle.
According to Saenz de Santamaria, the previous three incentives programs – which have all run out – helped in the purchase of 300,000 vehicles. The fourth batch of incentives will have a duration of six months, or until funds run out.
Vehicle sales in the country soared 29 percent in September, thanks to the government-backed discount programs. The sales growth contributed to the region's highest monthly car sales growth in over two years.
Carmakers are banking on Spain to help boost demand in Europe, which is currently on its way to post the sixth straight year of vehicle sales decline.
Authorities in the country are supporting the auto industry in order to increase consumption as well as to sustain manufacturing.
Wage cuts brought by an overhaul of labor rules last year have enticed carmakers like Ford to hike output in Spain, where production has surged 19 percent year-on-year in September. PSA/Peugeot-Citroen and General Motors Co. disclosed earlier this month that the latter’s Zaragoza site Spain will build a new version of a jointly developed minivan starting in late 2016.