According to the statement issued by the car makers’ association ANFAC, the country’s car sales for the month of January increased by 18.1% as compared to the same period of 2009, but will decrease in the second half of this year as Spanish government subsidies fade away.

Moreover, the hike in car sales comes after a rise of 25.1% in the month of December and 37.3% in the month of November. Car sales decreased 17.9% in last year to 952,772 vehicles.

In the month of May last year, the Spanish government started offering 2,000 euro subsides to new car buyers, in addition to a 700 million euro subsidy to replace old cars with energy-efficient models.

Further, the report released by the ANFAC said, “The continuation of government subsidies is having a positive influence on car sales.”

“In the second half of the year sales will be negative, with falls over 18 percent as a result of the 2 percentage point rise in VAT and an end to government subsidies,” said the report.

Meanwhile, the report also revealsed that sales of the most energy efficient cars increased by 53.8% in the month of January 2010.