Subsidy system provides some relief for automobile industry

The direct subsidy scheme introduced by the government to encourage car owners to scrap older vehicles for more environmentally friendly ones, known as the PIVE plan, helped partly stem the fall in automobile sales last month.

According to figures released Monday by the National Association of Car and Truck Manufacturers (Anfac), sales of new vehicles in November fell 20.3 percent from the same month a year earlier to 48,155 after a drop of 21.7 percent the previous month.

Despite the ongoing hemorrhaging in sales, industry player were reasonably satisfied at the outcome. “The plan has softened the drop in the market by almost 15 points,” the head of communications at Anfac, David Barrientos, said. “The fall in November was much less than expected.” Anfac had reckoned on a decline of 35 percent in sales in the month.

The PIVE came into effect in October but was only fully effective the following month. Sales in the period October-November were up seven percent from a year earlier.

The boost given by the subsidy was insufficient to wipe out the fall in sales accumulated since the start of the year. Purchases of new passenger cars in the first 11 months of the year were down 12.3 percent at 648,392, well short of the full-year 2011 figure of 808,000.

Delivery delay

Orders of new vehicles to be purchased under the subsidy plan reached 40,000 in November, half of what had been expected. There is an average delay of 45 days between an order being placed and the vehicle being handed over. Industry associations calculated that the 75 million euros set aside by the government for the PIVE plan could be stretched out to January.

The subsidy plan grants the owners of cars over 12 years old 2,000 euros if it is scrapped to buy a new vehicle with low consumption and emissions. Of the total 1,000 euros comes from the government and 1,000 from the manufacturer.

“We hope that the month of December shows a better performance because in addition to the PIVE plan, we have end-year sales offers,” Anfac’s Barrientos said.