New passenger car sales fell 9.3 percent in May in the EU as the effects
of government support for the car industry slipped away and the
economic environment remained difficult, industry association ACEA have
announced.

Governments helped carmakers hit by the crisis last
year with scrapping incentive schemes that boosted demand for new cars,
but these have finished or are running out and carmakers are worried
about the second half of the year.

ACEA said the May decline to a
total of 1,129,508 cars registered was the second monthly decline this
year and reflected “the end to government support schemes on the one
hand and the further challenging economic situation on the other”.

In the first five months in the EU, new car registrations were down 1.9
percent.

Germany, Europe’s largest car market, whose scrapping
scheme ended in September, saw a 35.1 percent dip in registrations.
France, whose scheme is being phased out gradually, saw an 11.5 percent
year-on-year decline in May.

Spain, whose scheme is still in
place, saw a 44.6 percent increase in May, compared with a low
comparison in 2009.

Data released at the start of June already
showed a mixed picture in some key European car markets in May, with
Spanish sales up, and French and Italian sales down, showing the impact
of government support.

The head of French carmaker PSA Peugeot
Citroen, Philippe Varin, said earlier this month that he expected the
European car market to shrink around nine percent in 2010.