WRAPUP 2-European car sales wax or wane with govt support

* Spanish car sales up 44.6 pct in May

* French car sales down 11.5 pct in May

* Italy car sales down 13.8 pct, Fiat share below 30 pct

* Asian auto markets show strong growth

* U.S. auto sales data for May due on Wednesday

(Adds Italy sales data)

By Paul Day and Helen Massy-Beresford

MADRID/PARIS, June 1 (BestGrowthStock) – European car markets in May
showed the impact of government support, for good or ill, as
French and Italian car sales fell, while Spain’s surged almost
45 percent.

Passenger car sales have been buoyed by scrapping incentive
schemes in major European markets, but some of these have run
out or are expiring soon, leading to forecasts of a tough second
half of 2010 from many carmakers.

In Italy, which scrapped incentives at the end of 2009, May
sales fell 13.79 percent year on year. Fiat (FIA.MI: ), whose
small, low-emission cars benefited from the tax breaks, dropped
below 30 percent market share for the first time since December
2005. [ID:nMAT012345]

The outlook for the Italian market dimmed last week when
Rome joined Europe’s austerity club with its own hefty package
of budget cuts. [ID:nLDE64O0R1]

“We are not expecting any chance of a recovery in demand,
not least in light of the tough measures contained in the
government’s package,” Gianni Filipponi, director general of
foreign carmakers’ group UNRAE, said in a statement.

In France, where an incentive scheme is still in place but
at a lower level than the 1,000 euros previously offered, new
passenger car sales fell 11.5 percent year-on-year in May to
186,337 registrations, carmakers’ association CCFA said.

“We expected this drop compared with the very high levels of
last year. Now we’re falling back to average levels the market
saw before scrapping incentives,” a spokesman said.

The last fall in the French car market was in April 2009.

Until the end of June, French car buyers can get 700 euros
for trading in an old car for a newer model, falling to 500
euros from July 1.

French light commercial vehicle sales, which had been
showing signs of recovery, underlining the economic upturn,
edged 2.8 percent lower year-on-year in May.

For the first five months of the year, passenger car sales
were up 7.2 percent in France, while light commercial vehicle
sales were up 10 percent over the same period.

Renault (RENA.PA: ) group sales rose 13.8 percent year-on-year
in May, with Renault brand sales edging 1.7 percent lower and
Dacia sales more than doubling.

“On the Renault brand we can see the full ‘Scenic effect’ —
it is a strong lever,” said Societe Generale analyst Philippe
Barrier, explaining why Renault sales dipped less than the
market.

PSA Peugeot Citroen (PEUP.PA: ) sales fell 13.1 percent, with
a 13.9 percent decline in Citroen brand sales and a 12.3 percent
drop for Peugeot.

“The impact of support is running out … and it is small,
entry-level vehicles which are feeling it most,” a CCFA
spokesman said.

In Spain, where buyers can get subsidies of up to 2,000
euros for new car purchases until the end of June, new car sales
rose 44.6 percent to 102,873 units in May, carmakers’
association ANFAC said. [ID:nMDT009078]

U.S. data for May is due out on Wednesday, with Toyota’s
(7203.T: ) performance of particular interest as investors seek
clues on whether the impact of incentives the Japanese automaker
introduced to combat a safety and recall crisis is waning.

Ford (F.N: ) sales analyst George Pipas told reporters on
Friday that the automaker expected “notable” gains in May sales.

Industrywide, May sales are expected to be slightly above
the average selling rate of 11 million units from January
through April, Pipas said. [ID:nN28189045]

Car sales data released earlier on Tuesday in Asia showed
strong growth in May, highlighting the importance of global
carmakers’ strategy to focus their attention on that region’s
fast-growing economies.

In Japan, overall vehicle sales including 660cc
mini-vehicles rose 22 percent year-on-year. [ID:nTKX006833]

India’s Bajaj Auto (BAJA.BO: ) saw a 62 percent increase in
May vehicle sales. [ID:nBMA007680]

Hyundai Motor Co Ltd (005380.KS: ) said sales rose 19 percent
in May, but the South Korean automaker’s shares fell as domestic
sales were down a steeper-than-expected 23 percent on a year
ago.

Hyundai, one of the top global performers during the
financial crisis and resulting sales slump, was the sole Korean
automaker with falling local sales for two months.

It faced new model launches by affiliate Kia Motors Corp
(000270.KS: ) and aggressive marketing of imports by rivals such
as Toyota Motor Co (7203.T: ). [ID:nTOE65006M]

Stock Market News
(Additional reporting by Gilles Guillaume, Kim Yeon-hee, Cheon
Jong-woo, Miyoung Kim, Chang-Ran Kim, Soyoung Kim, Kevin
Krolicki and Jo Winterbottom, editing by Will Waterman)

WRAPUP 2-European car sales wax or wane with govt support