Germany recently announced a program which gives money to citizens to scrap old polluting cars and buy newer, more fuel efficient ones. The program pays 2,500 euros ($3,500 USD) for each car scrapped.
The result has been an incredible success story. Over 150,000 applications have been received, getting polluting old junkers off the road and boosting auto sales by 21.5 percent in February in Germany – all while sales to foreign markets dropped an incredible 51 percent. In short, by getting people to ditch their old cars Germany may be saving their auto market as well as protecting the environment.
Now another European superpower, the United Kingdom, is considering adopting similar scrap-for-cash incentives to boost its struggling auto sales. The Society of Motor Manufacturers and Traders, an industry group, has submitted a plan for a similar scheme to the British government.
The plan could provide a much needed boost for both the UK’s domestic automakers and for U.S. automakers like Ford and GM that sell or own brands in Britain. Apparently, Ford is so confident that the lawmakers will adopt the plan that it has changed its sales figures based on it. Ingvar Sviggum, Ford Europe sales chief, has said he "really expects" the program to go through.
The UK desperately needs something to boost its auto sales. Sales plunged 22 percent in February and are expected to drop even more severely in March. It will likely be hard to argue against a relatively affordable scheme that has the potential to not only save the environment, but the auto industry as well.
written by Orfintain, March 17, 2009
written by Miel Breitsammer, March 17, 2009
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