• Mar 4, 2009
Countries looking to shore up their lagging auto sales now have a shining example to follow in Germany, Europe's largest market for new car sales. In February, sales rose by 21%, which is an astounding figure when you look at the results for the same period in other countries, including the United States, as the weak global economy puts a stranglehold on consumer pocketbooks.

What's the secret? Germany has recently instituted a new set of incentives that pays motorists €2,500 to scrap their old car in exchange for a new, more fuel efficient model. Domestic manufacturers reaped the largest rewards, posting a 63% gain in February orders.

Could such a system work in the United States? It's possible, but the costs of such a stimulus would be huge and there are a number of organizations vehemently opposed to the idea that it's a good practice to remove older machines from the roadways. Still, it's a thought that could gain traction based on the success that Germany has achieved.

[Source: Automotive News - sub. req'd | Photo: nico.cavallotto]


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  • 27 Comments
      • 5 Years Ago
      I think everyone should be able to afford transportation. This legislation will only drive used vehicle prices up. The same things could be said about car crushing as abortion. What if twenty years ago someone decided to crush my baby girl 240z, the thought makes me want to kill...
        • 5 Years Ago
        Go F yourself and tag your own site. You stay away queer bate.
        ****************************************************************
        • 5 Years Ago
        Whoa now I never said they should get free transportation. I'm just saying there is nothing wrong with a glut of early 90s civics for poor people to drive around.
      • 5 Years Ago
      Just FYI

      Slovakia, still the largest per-capita car manufacturer in the world, introduced similar scheme worth 2,000 euro today too.

      It's applicable towards new cars costing less than 25,000 euro (including 19% tax) - that's about $31,500. The old car had to be made before Dec 31 1999.

      There's a catch, though. The incentive alone is 1000 euro - if the car manufacturer throws in additional 500 euro towards scrapping, the government throws in yet another 500.

      Essentially, that's like having a dealer to offer you a 500 euro discount - which is something that you normally just don't get from a dealer over there. I've no idea how this wold work, but let's see.

      The measure will kick in next week.

      About that per-capita manufacturing -
      http://www.acea.be/images/uploads/pr/SK_March_20.pdf
      http://www.industryweek.com/articles/slovak_car_industry_production_almost_doubled_in_2007_16083.aspx

      US would have to make 32 billion cars a year :-)
        • 5 Years Ago
        Umm... I think you mean 32 Million, not B illion

        "Car production in Slovakia reached a record 571,071 in 2007," association director Jozef Uhrik said, adding that the average of 105.7 cars manufactured for every thousand inhabitants put it in first place worldwide for production per head.
      • 5 Years Ago
      This whole thing is turning into a scam.

      Several investigative reports in Germany have shown that many of these old cars are no being scrapped, but criminal gangs are shipping them to Eastern Europe where they are put back on the road. Basically a big cash windfall for organized crime courtesy of the German tax payer.
        • 5 Years Ago
        thats BS... you only get the money if you scrap at a registered scrap yard your old car that was one year registered on your name and you only recive the money if you buy a new car and registere it on your name....there is no room for criminals shipping cars to the east...and btw countrys like russia have increased import tax on used cars to such a high level that it is completely uninteresting to import used cars from the west..
        • 5 Years Ago
        It's not BS, it is a fact. The system is riddled with corruption.

        http://www.wdr.de/tv/monitor/sendungen/2009/0129/abwrack.php5

        News reporters themselves took old cars to authorized scappers, who then in turn illegally export the cars from the country.

        "there is no room for criminals shipping cars to the east...and btw countrys like russia have increased import tax on used cars to such a high level that it is completely uninteresting to import used cars from the west. "

        You obviously have no clue how corrupt Eastern Europe and Russia are. Illegally importing cars from the West and bypassing government fees is a huge business there since the fall of Communism; operated mainly by organized crime.

        Russia is also a major destination of stolen cars from North America and Western Europe.
      • 5 Years Ago
      Sorry....this is such trolling but ...come on....the classic Wolfsburg in the same article as scrapping cars? That's one of the few that should be pulled out of the grass and driven for the Next 50 years!
      • 5 Years Ago
      Almost anything is worth a try. However, I would stipulate that the new car be manufactured in The US. Not Canada, Mexico, etc., regardless of the "brands" country of origin. This would probably be seen as protectionist on the one hand and would force Americans to realize how many of the Big 3's cars are made outside of the US which probably would not go over well with them.
        • 5 Years Ago
        I have to agree with you on most of your points and you brought up something I've been thinking about.

        1/ Cars are built better and last longer. Is there really a reason to constantly buy new cars?

        2/ The buying binge is over. Could it be that we just don't need so much "stuff"?

        I write for a magazine and my next big column is going to be all about "the death of bling." I think we might have just been goaded into buying and buying and now we're sort of sick of it and the Wall St / Big Government types just don't know what to do. It's not a Republican or Democrat Obama or Bush thing.

        Maybe our bellies are just full.
        • 5 Years Ago
        Yes I read the article about the Cash for Clunker proposal in autoweek
        http://www.autoweek.com/article/20090205/CARNEWS/902059989
        Not a bad plan $10K for a 10 years or more as long you get car that is more fuel efficient and made in USA. Not Mexico, Not Canada, Not Korea, Not Europe, Not Japan. So those foreign car companies cant complain about the protectionist. I know so far only Mazda complain because they dont have a car factory here in USA Unlike Honda,Toyota,Hyundai,Nissan,Mercedes,BMW they all have their own plant here in USA. More job for people here in USA that is a good news and this will also FORCE "domestic" car companies to bring job back to USA not send it to Korea,Canada,Europe or Mexico.
        • 5 Years Ago
        @Tony
        It'd be more than quite small...there isn't a single production car made in North America today that has 100% domestic content.
        And in the domestic content ratings actually count both US and Canadian parts anyway...so a car with 95% parts made in Canada is still a 95% domestic content rated car in the United States and vice versa. Which is admittedly a rather bizarre way to label things.

        Not that it matters anyway, people who live in states near the Canadian border don't really go for too much US vs Canada kinda thinking since their kids all play in the Canadian hockey leagues =p
      • 5 Years Ago
      If we were allowed to buy German and Japanese cars, it would rock.

      Malibu Hybrid is hardly an eco-vehicle.
      • 5 Years Ago
      Instead of scrapping them, they should offer the same incentive and then use the used parts to pay for the incentive plan. That would remove what is supposed to be SEMA's main objection that it makes fewer parts available for people restoring cars and should offset a good portion, if not all, of the cost.
        • 5 Years Ago
        Pssst....SEMA's not really concerned about used parts. They want to keep old cars on the road because more old cars = more money for their members.
      • 5 Years Ago
      It's a great idea. Out with the old, in with the new.

      HOWEVER, a vehicle must obtain over 25MPG combined to qualify. The rebate should not be a tax credit either, but an immediate government subsidy on traded in cars. Plus, any car traded in must be registered and in driving condition, and worth at least $1,500 in the last NADA issue. This will help to prevent people from towing in cars from junkyards to abuse the incentive.
        • 5 Years Ago
        Destroying road-worthy cars worth $1,500+ seems incredibly wasteful.
      • 5 Years Ago

      Will it affect classic and vintage cars?
      • 5 Years Ago
      Merkel announced today that Opel is not "relevant to the system".

      Merkel signals tough line on German aid for Opel
      Wed Mar 4, 2009 2:02pm EST
      By Brian Rohan

      BERLIN, March 4 (Reuters) - German Chancellor Angela Merkel has told fellow party members that Opel is not systemically crucial to the German economy, suggesting Berlin could take a tough line on aid to the troubled carmaker.

      Merkel, who has left open the possibility of granting Opel state aid, possibly in the form of guarantees, made the comments late on Tuesday as the carmaker's parent firm, General Motors (GM.N), warned 3,500 jobs at the German company were at risk.

      Merkel told members of her conservative Christian Democrats (CDU) parliamentary party that Opel should not expect any special treatment and should not be saved at any price, a CDU official who had attended the meeting told Reuters.

      She described Opel as not "relevant to the system", the official said.

      GM Europe head Carl-Peter Forster told top-selling daily Bild that Germany, where 25,000 Opel staff work, would have to provide the lion's share of the 3.3 billion euros in state aid the company has said it needs to survive. [ID:nLR868150]

      Merkel's government has left the door open to helping Opel but her comments to party colleagues suggest a tougher line than Berlin has taken with its banking sector.

      Her cabinet ministers have repeatedly said the government would not allow the failure of financial institutions deemed to be of "systemic relevance" to the German economy.

      A government spokesman said Berlin was still waiting for more information before it could make a decision on state aid.

      Finance Minister Peer Steinbrueck has said a restructuring plan the company showed the government on Monday did not adequately map out a sustainable development path for the company.

      Opel makes cars in factories across Europe, including in the Belgian city of Antwerp, Zaragoza in Spain, and Ellesmere Port in Great Britain.

      In his newspaper interview, Forster said Germany would have to shoulder 2 billion to 3 billion euros of aid if Spain, the UK and Belgium helped contribute.

      Belgium's Flanders region was cautious about the funding matter on Wednesday, telling Reuters it would study Opel's plan and was considering a loan guarantee of up to 300 million euros, but that would depend on a plant in Antwerp remaining open.

      "If it's a viable plan, we will see what contribution Flanders can make to it," said Christine Faes, an aide to Flemish Premier Kris Peeter, who has been in talks with other European leaders and with GM about the future of Opel.

      German Economy Minister Karl-Theodor zu Guttenberg is due to travel to the United States later this month for talks with GM and the government.

      Sources told Reuters on Tuesday that a decision on state aid to Opel could hinge on whether GM receives further help from the U.S. government.

      Merkel is to visit the Ruesselsheim headquarters of Opel on March 31.

      http://www.reuters.com/article/marketsNews/idINL426297420090304?rpc=44
      • 5 Years Ago
      important note...the scrapping bonus is only payed for cars older than 9 years and at least one year registered on the owner...
      this has no effect on used car market up to 9 year old cars... and the bonus is limited to 600,000 cars or till the 31.12.2009, depending what is reached first (most likely the 600,000 number)
      • 5 Years Ago
      "Could such a system work in the United States? It's possible, but the costs of such a stimulus would be huge..."

      Since when would this administration be deterred by the costs of something?
        • 5 Years Ago
        Our new government would definately go fo it. Just another avenue for them to get people to depend on them even more.

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