Spanish Market May Be Nearing Bottom

MADRID – The Spanish car market could be showing the first signs of recovery after several months of year-on-year declines that have hovered near the 50% mark.

With sales still off 9.9% from like-2008 in the first 20 days of June to 56,597 vehicles, it is clear the market’s problems are not completely solved, but prospects are beginning to look more positive, observers say.

One reason for optimism is the implementation of the 2000E Plan, Spain’s version of cash-for-clunkers that offers incentives for trading in vehicles more than 12 years old for a new, more fuel-efficient model.

“Now, we can think that it’s possible to sell cars in Spain once more,” says Juan A. Sanchez, president of GANVAM, the Spanish association of automobile dealers, vendors and repairers.

But some dark clouds still remain.

Sales through the rental channel remain down 20% from year-ago, accounting for 12,174 units, or 21.5%, of the total June 1-20 tally. Sales to individual buyers fell a more modest 6.7%, meaning the 2000E Plan, as expected, is having a bigger impact on this sector of the market.

Sanchez, who chairs an association covering 10,300 members, including more than 2,400 auto dealers and 3,000 used-car vendors, believes the 2000E Plan ultimately could boost sales by 100,000 units in 2009.

The year has been an extremely tough one so far for new and used-car dealers.

“From the beginning of 2009, more than 10% of the small auto dealers have disappeared from the market, and 80% of those did it by closing their business forever,” Sanchez says.

“The 2000E Plan seems to be working, but we must not forget the important contribution of the auto dealers to this result, because dealers are putting in advance the economic subsidies included in that Plan,” he adds. “Therefore, for dealers and vendors it’s crucial that the Spanish government keeps its word of bringing us back that money in a 15days term.”