EU car makers sales rose in June for 1st time in 14 mos

EU car sales rose in June for the 1st time in over a year thanks to gov't. "cash-for-clunkers" handouts, car makers said. Manufacturers' group ACEA said sales rose 2.4% to 1.46M units, the first increase after 14 months of falling sales. It warned sales for the first six months of the year were down 11% from a year ago as nearly 1M fewer cars left showrooms. Car producers are cutting back, it said, & car output will likely fall by a quarter this year & by over half for vans & trucks. It is also worried that sales will plunge suddenly next year, when gov'ts. end payments for car buyers who trade in old model for a new fuel efficient car. The state incentives fired up car sales this year. Germans get euro2,500 ($3,500) in cash for swapping cars. This accelerated sales by 40.5% in June in Europe's biggest market & by 26% for the first half of 2009 compared to '08. Sales also were up in June in 2 other nations with the programs: in Italy by 12.4% & in France by 7%. ACEA said handouts for car buyers cushioned slid sales in Spain, down 15.9% & UK, down 15.7%. Both countries were hit hard by collapsing house prices which has held shoppers back from big purchases. Most major manufacturers saw sales grow in June. Sales at Europe's top seller VW rose 9.5%, as Italy's Fiat saw a 11.7% gain as its cheaper small cars sold strongly. PSA Peugeot Citroen sales rose 4.4%, Ford rose 2.2% & Renault up 3.4%. Luxury car makers did badly. BMW sales fell 10.9% & Daimler down 2.7%. GM. was also down, by 8.4%, while Toyota fell 4%. ACEA said incentives are helping sales of small cars but are failing to make a major dent in overall demand this year.