French car sales plunge in August in blow to coronavirus recovery hope

French car sales fell by a fifth in August, erasing gains made during the previous two months and damping hopes for a rapid recovery from the coronavirus pandemic in one of Europe’s biggest markets.

Passenger car registrations dropped 19.8% compared with the same month last year, according to figures published Tuesday by industry group CCFA, the first major European market to release them. The total of 103,635 was the lowest since May, when showrooms and factories started to reopen after lockdown measures to contain the virus.

While August has traditionally been a tough month for French car sales because the country’s consumers normally spend it on vacation, the figures were higher last year and in 2018, the group said.

PSA Group registrations dropped 8.4%, a better showing than Renault SA’s decline by a fifth. French car sales are down by 32% after the first eight months of the year, CCFA said.

Government subsidies in countries including France and Germany helped kick-start business starting in June, especially for battery-powered models. Total sales across Europe slipped just 4% in July, according to auto-market researcher Jato Dynamics, with hybrid and electric-car registrations soaring due to the incentives. In France, car sales increased in June and July compared to the same months in 2019.

French President Emmanuel Macron unveiled a raft of measures in May aimed at reviving France’s car industry and drawing workers back to local factories.

Incentives took effect June 1 for the purchase of electric cars and a cash-for-clunkers plan designed to encourage consumers to trade in older, more polluting cars for 200,000 new vehicles.