Spain June Sales Promising

Finally, after months of battling the economic crisis, Spain sees the light of day as new vehicle sales recorded slight improvement in the country, largely thanks to the scrappage incentives set up in the country. France on the other hand continues to enjoy increasing sales, thanks to the same reason.

Still, the two countries are at opposite ends. France reported a 7.1 percent increase in June over the same period of 2008. Spain on the other hand reported still negative figures. The good news is that the drop no longer stands at over 35 percent, as in May, but at only 15.9 percent.

"What is probably happening is that the economy has fallen to such depths that it is beginning to stabilize at low levels," Nicolas Lopez, M&G Valores analyst, was quoted as saying by Autonews.

Spanish automotive industry already started fearing the end of the scrappage scheme, scheduled to take place at the end of 2009. Industry groups have already begun asking for extensions should the money for the schemes run out prior to the end of the year.

"We're still a long way from the end of the year and everyone is conscious of the issue. We're sending the authorities a message of caution and it's up to them to decide the best way to play it," Xavier Fels, president of industry group CCFA said in a press conference.

Unfortunately, the Spanish government no longer posses the money to refinance the scheme. The bank of Spain also warned it has no more room for further fiscal stimulus, after the government started one of the world's largest fiscal packages.