Scrapping incentives boosted new car registrations in Germany, Europe’s biggest market, even more in March as sales leaped 40% to around 401,000 units.
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New car sales advanced by more than 20% year on year even when adjusted for extra working days, Reuters reported, citing data compiled by the VDIK car importers association.
The government car-scrapping programme had prompted the trade group to forecast double-digit percentage growth in new registrations in the first quarter despite steep declines in other major markets.
Vehicle sales began to rise last month after a EUR1.5 bn (US$1.98bn) subsidy programme was launched, boosting February sales 21%.
The government has now extended until the end of year the subsidy that pays owners EUR2,500 to scrap cars at least nine years old if they buy a new model in exchange.
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By GlobalData“The decision to top up funds for the (bonus scheme) came just in time given that the money originally approved has run out,” VDIK head Volker Lange told Reuters, calling the programme a key factor to shore up consumer confidence and stabilise demand.
The incentive has fuelled demand for small cars in particular but has drawn complaints from German retailers that the scheme was sucking demand away from other businesses.
