Spanish Dealers Seek 9th Cash-for-Clunkers Plan

MADRID – The head of Spain’s Federation of Auto Dealers Assns. calls on the government to enact a ninth version of its cash-for-clunkers program offering subsidies to new-car buyers who trade in their older vehicles with higher greenhouse-gas emissions.

Jaime Roura also tells more than 1,000 attendees at FACONAUTO’s recent 26^th congress that the Spanish government should cut taxes on new-vehicle purchases.

Dealers in 2016 averaged 1.6% profitability on 2016 sales of €7 billion ($7.4 billion), a margin far from the desired 3% “that has already been reached by our colleagues in the U.S.,” he says.

Roura predicts profits will continue increasing during 2017 and 2018, although sales should remain at about 1.2 million units both years. That would be a slight drop from the 1.3 million deliveries tallied in 2016 by WardsAuto.

Reinstating the PIVE cash-for-clunkers program, the last version of which expired in July, would “slow down the serious problem of aging that our national car fleet suffers,” Roura says, claiming 65% of vehicles on Spanish roads in 2020 will be at least 10 years old.

“An intensive and extended…scrapping plan is the key to curbing the serious problem of aging of the national car fleet that our country suffers,” he says. “The impact on improving road safety and air quality, especially in cities, would be undeniable.”

Roura’s claims regarding the age of Spain’s vehicle fleet are difficult to verify. The government agency that tracks vehicle registrations has estimated there are as many as 2.7 million vehicles that may no longer be in use.

Just as important to dealers, Roura says, is a tax cut on new-vehicle purchases. Buyers pay both a value-added tax of 21% on the vehicle’s price and a registration tax that ranges from 4.5% of the acquisition price on vehicles with carbon-dioxide emissions between 120 g/km and 160 g/km, and 14.75% on cars with CO2 emissions between 160 g/km and 200 g/km.

Cars with CO2 emissions of 120 g/km or less are exempt from the tax; the industry estimates about 80%, or 830,000 of the 1.14 million new cars registered in 2016, although the government collected €327.7 million ($346 million) in registration taxes, up 7% from 2015.

The Spanish Treasury, under pressure by the European Commission to reduce its public deficit to 3% of gross domestic product from the current 4.7%, is considering tightening the registration-tax exemption to cover purchases of cars with CO2 emissions not exceeding 90 g/km.

Roura calls on automakers and dealers to work together to defend the industry, which together contributes to 12.9% of the national GDP and directly employed 153,928 people in 2016, including more than 7,300 new hires.

Roura, the head of the SEAT dealers association, is stepping down as FACONAUTO president two years before his second 4-year term expires. Association Vice President Gerardo Perez, who heads the Renault dealers association, says he is a candidate to succeed Roura.