Daily Auto News “Cash for Clunkers” — How Europe is Boosting Car Sales
Daily Auto News
While the U.S. saw a 37 percent decline in auto sales last month, AFP reports, “German auto sales shot up 40 percent in March compared with the same month in 2008 in what analysts on Thursday called a “shopping frenzy” that will lighten the recession in Europe’s top economy.” The boost, the German VDA Automobile Federation says, “was due to a government bonus for scrapping old cars for newer, greener models as well as a larger number of business days this year.” In a research note analyzing the German sales surge, the Italian banking group Unicredit said, “Something has started which had not occurred for a long time in Germany: a shopping frenzy … Applications for the car-scrapping premium literally skyrocketed, exceeding one million.” They cautioned, however, that “this did not mean an end to recession..
France and Italy have begun similar programs. French auto giant Renault, according to Forbes, “Reported an 8.1% increase in overall registrations in France, and a 12.8% increase in sales, boosted by the cash incentive. Peugeot Citroen said its sales were up 12.8%.” Italy saw a similar jump, as “Italian new car registrations increased for the first time in a year, rising 0.2%, to 214,218 units in March, transport ministry figures showed on Wednesday.”
Reuters notes, “In Spain, the fall in car sales eased to 38.7 percent in March after a 48.8 percent drop in February, also partly due to a government stimulus plan, carmakers association Anfac said.”
Could the United States follow Europe’s lead? Similar “Cash for Clunkers” programs have been considered twice in Congress in the last year. The first effort failed, the second has yet to reach a vote — but President Obama endorsed the idea in his recent speech on the auto industry. In a separate story, Reuters reports, “The centerpiece Obama incentive is proposed legislation that would give consumers a voucher worth between $3,000 and $5,000 toward a new, fuel efficient car in exchange for a poorer performing older model … But the plan would cost billions and Obama and congressional supporters would have to find a way to fund it.”
Bloomberg reports, “Supporters are trying to persuade colleagues to help reverse plunging auto sales by funding the vouchers through a shift of $2 billion or more from the $787 billion economic stimulus law Congress approved in February. ” One wrinkle, however, may slow the legislation in Congress. Bloomberg explains, “The new measure offers higher payments for vehicles produced in the U.S.” That aspect of the proposal has encountered opposition from some foreign automakers, and “the Arlington, Virginia-based Association of International Automobile Manufacturers has said the bill ‘certainly discriminates’ against non-North American manufacturers.”
If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.
Related with this news Japan Auto Store's other car news
