The Spanish government said it would extend a scrappage scheme that subsidizes purchases of new cars. The subsidies have tempered the fall in sales in the recession-hit country.

Deputy Prime Minister Soraya Saenz de Santamaria said the government would soon pass a decree to add 70 million euros to the scheme after an initial 150 million euros ran out.

Under the scheme, people who scrap their old car and buy a new one get a rebate of 2,000 euros, half from the government and half from the carmaker.

Car manufacturers’ association Anfac welcomed the move which, it said, would boost the Spanish economy.

The scheme has helped sales to individuals but failed to offset the decline in sales to companies.

Spanish car sales, which have been on a downward trend for the last four years, fell 0.7 percent year-on-year in June. That compares to a 6.3 percent fall in overall European car sales last month.