MADRID -- New-car sales in Spain will continue to be boosted by subsidies after the government said it will renew a scrappage program for the last time.
The program has been extended seven times previously and has helped to fuel growth in the Spanish auto market for the last 20 months after the country fell into a severe recession.
The government has set aside 225 million euros for the latest round of subsidies. Buyers will benefit from a discount of up to 2,250 euros when they exchange their old vehicle for a new one.
The 2,250-euro discount applies to seven-seat vehicles and is intended to help families with three children or more. The discount is 750 euros less than the previous subsidy. Other models attract a 1,500-euro discount, 1,000 euros less than the previous amount.
The government funds half of the discount while automakers fund the other half.
The Spanish car industry lobby group ANFAC welcomed the extension but its president, Jose Luis Lopez-Schuemmer, warned against complacency.
“We have to work on becoming more efficient and profitable,” Schuemmer, who is head of Mercedes-Benz Spain, said in a release.
About 900,000 cars have been bought through the program since its launch in 2012, according to the ministry of industry in Spain.
Spain’s new-car sales rose by 24 percent to 349,857 through April. Industry analysts IHS Automotive expects full-year sales of 966,000 units this year, up 13 percent from 2014, with the market growing to 1 million by 2017, well below peaks reached before the last major recession.
The latest extension of the program will be the last, industry minister Jose Manuel Soria said. The government has not given details on how long the extension will last.