(Source: Spiegel Online via Business  Week)

To boost ailing carmakers, the British government is expected to offer customers a premium to exchange clunkers for new vehicles—as Germany has done

The paper writes that Darling and officials in the Treasury have been impressed by the results the programs have delivered in other countries. Last month, Britain experienced a 30 percent drop in new car registrations at a time when Germany recorded 40 percent more vehicle sales than during the same period a year earlier. In Germany, Treasury officials noted, the precipitous drop in auto sales has been reversed.

The Times reported that details are still being hashed out between the Economics Ministry and the Treasury in London, but that the plan will look a lot like Germany’s. According to the paper, a £2,000 (€2,200) scrapping premium is to be given on trade-ins of any car over nine years old.

In contrast to Germany, though, Darling and Economics Minister Peter Mandelson are also seeking industry participation in the program. At the very least, they want a binding commitment that existing rebates will not be dropped because of the government program. So far though, the paper reports, the British automobile industry is resisting the government’s push for it to support the program with its own means.

In addition to Germany, a number of European countries including Austria, France, Italy, Portugal and Spain also have stimulus programs in place for carmakers suffering from thecredit crunch and global financial crisis—and the success of these stimulus efforts has been measurable. China and Brazil have also succeeded in increasing car sales again.

“A scrapping scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand,” Britain’s Society of Motor Manufacturers and Traders (SMMT) chief executive Paul Everitt told the Times. “The UK is the only major European market not to implement a scheme.” SMMT estimates the one-year program would cost about £160 million.

Last week, the United States also said it would adopt the successful European recipe. During a dramatic speech to the auto industry, US President Barack Obama praised the scrapping premiums as exemplary and “successful” and pledged to introduce a similar program in the US. But the program could be a lot more expensive for the United States than Britain: Already, an estimated 250 million cars and trucks are driven in America. Of those, close to 30 percent are at least 15 years old, meaning the country could have as many as 75 million candidates for scrapping.

In Germany, demand has been so strong that the government plans to extend its scrapping bonus through the end of the year. Last week, Chancellor Angela Merkel’s cabinet moved to extend the scheme until Dec. 31 and to provide €5 billion in government funding—enough to cover up to 2 million cars.

Click here to read more.   Transportgooru has already published a number of articles on this topic in earlier months.  Please feel free to explore them:

Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S

Germany plans to extend Abwrackprämie aka “Environmental Bonus”

The bickering starts over the implementation of the Cash for Clunkers legislation

Obama Favors “Cash for Clunkers”

Germany increases subsidy to 5 Billion Euros, tripling incentives for its “Cash for Clunker” (Abwrackprämie) program

(Source: Telegraph, UK) Germany is more than tripling the incentives on offer to buyers of new cars as it attempts to boost its auto industry, which employs around 15pc of the nation’s workforce.

The scheme offers German consumers €2,500 for trading in vehicles more than nine years old if they buy a car that is less than one year old.

Click here to read the entire article.  

TransportGooru has compiled several articles in the past reporting on similar efforts in UK (which is now contemplating introduction of  a similar program after watching the Germans successfully implement the program) & USA.  Here are the links to some of the earlier articles:

Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S

Germany plans to extend Abwrackprämie aka “Environmental Bonus”

The bickering starts over the implementation of the Cash for Clunkers legislation

Obama Favors “Cash for Clunkers”

(Source: TreeHugger); Video: YouTube)

 Yesterday President Obama told Chrysler and GM that it is time to shape up or ship out. He also said he supports a program that would pay people to trade in older cars for newer, more fuel efficient vehicles. Europe has successfully tried this, but could it work here and would it be good for the planet? 

Speaking about a so called “cash for clunkers” program, Obama said:

Here is an analysis from a News portal on what it could mean for consumers.

(Source: Autoblog)

Aftermarket group warns Cash For Clunkers legislation will expand landfills

The House is currently looking at a Cash for Clunkers bill that would give owners of eight-year or older vehicles up to $5,000 to turn in their car or truck for a more fuel efficient vehicle. The deal sounds great for the owners of beaters, and automakers wouldn’t complain much either. The most politically friendly aspect of the legislation, though, is the perceived positive impact on the environment. More fuel efficient vehicles emit less CO2 than an older model, and less oil use means less drilling. Less drilling means a decreased dependency on foreign oil. That sounds like a win, win, win, win proposition, but one organization isn’t so sure.

The Fight Cash For Clunkers group claims that the legislation would do more harm to the environment than good. Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association, says Cash For Clunkers will lead to more vehicles being scrapped, which would then lead to more car waste in landfills. The group would rather owners of older vehicles take steps to improve the efficiency of the vehicles they already own. 

Click here to read the entire article and don’t forget to register your comments below on tihs very important issue.  Take action!

Note: Transportgooru wonders how other Governments such as Germany are able to successfully implement similar programs ( while battling this environmental/recycling challenge ).  Instead of fighting the Government, can Fight Cash for Clunkers work with the Government and find meaningful ways to approach this issue.  Failure to understand and implement this program soon, may soon lead to behemoth challenges, both economically and environmentally.  Here are some related  articles from the Transportgooru.com archives:

(1) Consumer Assistance to Recycle and Save (CARS) Act revives “Cash for Clunkers” scrapping plan in U.S.

(2) Should the U.S. institute a vehicle scrapping plan?

(3) Germany plans to extend Abwrackprämie aka “Environmental Bonus” (in plain english, car scrapping program)

(Source:  Autobloggreen)

 It’s rare for the Detroit 3 automakers, the UAW and various politicians to agree on anything meaningful, but that’s exactly what appears to be happening after Rep. Betty Sutton of Ohio (D) introduced a bill in Congress called Consumer Assistance to Recycle and Save bill (CARS Act) that revives the so-called “Cash for Clunkers” plan. This bill would offer consumers up to $5,000 to trade in a vehicle that’s at least 8 years old in exchange for a new one built in the United States that gets at least 27 mpg if it’s a car or 24 mpg if it’s a truck or SUV. The total payout would be based on the new vehicle’s mileage rating.