Germany and Italy are the latest countries to report March increases in car sales helped by government scrapping incentives.
In Germany, registrations increased 40 percent last month. In Italy, a 0.24 percent rise in registrations was celebrated because it was the first increase in a year. France's auto association, the CCFA, has already reported an 8.1 percent rise in registrations in March compared with the same month in 2008.
The European boom from scrapping incentives is raising eyebrows in the U.S., where President Obama and Congress are pushing for similar measures. But the legislation has stalled while lawmakers -- and competing factions in the auto industry -- debate whether the incentive should only cover the purchase of American-made vehicles.
Foreign automakers contend all new vehicle purchases in the U.S. should be covered by the incentive.
More good news in Germany
Germany's car importers association, the VDIK, today said car sales in Europe's biggest market increased to about 401,000 last month.
The German government's car-scrapping program prompted the VDIK to forecast double-digit percentage growth in new registrations in the first quarter.
Berlin has now extended until the end of year the 1.5 billion euro ($1.98 billion) program it launched in February that pays owners 2,500 euros to trade in cars that are more than 9 years old for newer, more fuel-efficient models.
"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 said.
New-car sales in Germany rose 21.5 percent to 277,740 in February, the first full month that the scrapping incentive was available.
Italy expects April, May boost
In Italy, industry watchers said a 0.24 percent in March registrations to 214,218 was a sign that the government's scrapping subsidy is working.
Car orders in March rose 36 percent on the year to 276,000, said Italy's foreign carmakers association, UNRAE.
"An orders portfolio so high will certainly have positive effects on registrations in April," UNRAE said, noting that, unlike last year, the Easter holidays this year fall in April, lowering the number of working days.
Research group Promotor expects that the full effect of the country's incentive program will be seen when new-car sales data is released for April and May.
Fiat saw its Italian sales for its three brands increase 6.1 percent to 69,882 units in March, Reuters calculations showed.
Fiat's market share in Italy rose to 32.62 percent compared with 30.83 percent in March 2008. The group's orders in March rose 59 percent, a company source said.
France, Spain sales sales joy
The French car manufacturers association, CCFA, said an 8.1 percent rise in last month's registrations to 204,095 unit was helped by the government's scrapping bonus and environmental taxes aimed at promoting sales of fuel-efficient cars.
CCFA President Xavier Fels estimated that 30 percent to 40 percent of all sales in March benefited from French government scrapping incentives.
In Spain, March new-car sales dropped 38.7 percent to 76,503, but were supported by the government's Plan Vive-2 scrapping incentive program, said the country's automaker association, Anfac.
France, Germany, Spain, Italy are among European countries whose governments are offering buyers incentives between 1,000 euros and 5,000 euros to swap old cars for new, less-polluting models. The United Kingdom is considering a similar scheme.