New vehicle registrations in France dropped 23.5pc to 178,983 units in July from the prior month, according to statistics published by Comité des Constructeurs Français d’Automobiles (CCFA) on Monday.
The figures suggest that pent up demand and sales incentivized by a government scrappage scheme, which ended on July 31 after financing approximately 200,000 purchases since June, have begun to fizzle out. Although the initial government-backed scrappage scheme has ended, the Ministry for Ecological Transition announced on July 27 it would be replaced by a more restricted “conversion bonus system,” from August 3 onwards.
Under the scheme, French citizens will be eligible to scrap diesel vehicles registered before 2011 and petrol models registered before 2006. In a bid to target low-income buyers, the Government has also reduced the income ceiling for the new scheme.
Participants can receive either €5,000 or €2,500 for an electric or plug-in hybrid (PHEV), contingent on income, under the new scheme. Meanwhile, the purchase of diesel- or petrol-powered vehicles can be boosted by either €3,000 or €1,500, similarly dependent on income.
The more restrictive requirements will likely cap the strength of sale in the months to come given that consumer confidence is still relatively low though an extension to the scrappage scheme, albeit to a lesser degree, is positive for new vehicle sales and underlying steel consumption.