Reiterating their position from last December, SEMA has issued a statement against the ever-more-likely "Cash for Clunkers" proposal. This proposal, which would give Americans a financial incentive to get rid of older vehicles in favor of new models, could grant incentives of $3,000 to $5,000 to scrap vehicles that are at least eight years old and buy a new car that gets at least 27 miles-per-gallon on the highway (24 mpg for trucks). SEMA, the Specialty Equipment Market Association, joins the Automotive Aftermarket Industry Association (AAIA) in taking their opposition public. Here's their reasoning:
SEMA and the AAIA basically say that there are tremendous downsides to the Obama Administration's plan. SEMA argues that taxpayer dollars would be wasted "on a program that may produce an artificial spike in sales, but does not reduce emissions or increase fuel efficiency." SEMA also warns that the program will be "misused by those who own two or three older cars and seek to take advantage of the taxpayer give-away. Many of these cars aren't frequently driven, if at all, so destroying them will not clean the nation's air or make us less dependent on foreign oil." The AAIA puts the whole thing even more bluntly: Cash for Clunkers "will harm the environment, negatively impact car owners, waste billions of taxpayer dollars and hurt the hundreds of thousands of vehicle service and repair businesses in America."
The AAIA represents 100,000 repair shops, parts stores and distribution outlets while SEMA has 7,358 member companies. Clearly, both of these organizations benefit from having older cars that are no longer covered by warranty on America's roads. SEMA admits as much, saying that the government's proposal will "hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country."
The AAIA recently tried to fight the bill by saying that landfills would be stuffed to the gills with scrapped cars if it becomes law. Of course, 84 percent of cars (by weight) are recycled and 95 percent of vehicles go through the recycling process in the U.S. There are other environmental reasons to oppose the proposal: tremendous amounts of energy and resources are required to build new cars, for example. And, without a requirement of a mpg increase from the scrapped vehicle (not just the stated minimums for the new vehicles), the Cash for Clunkers program won't necessarily have a huge impact on greening the nationwide fleet. But the government is interested in stimulating sales right now, and scrappage programs like have shown that they can work.
[Sources: SEMA; Automotive Aftermarket Industry Association / Photo: dave_7, CC2]
Administration Cash for Clunkers Proposal Bad for Consumers & Environment
Trade Association Cautions Against Creating Another Home Mortgage Debacle
BETHESDA, Md., March 30 /PRNewswire-USNewswire/ -- While the Automotive Aftermarket Industry Association (AAIA) supports efforts by the Obama administration to help stabilize U.S.-based vehicle manufacturers, the association cautions that the "Cash for Clunkers" proposal will harm the environment, negatively impact car owners, waste billions of taxpayer dollars and hurt the hundreds of thousands of vehicle service and repair businesses in America.
AAIA strongly opposes the use of Cash for Clunkers programs, which threaten jobs in the independent aftermarket industry by removing repair opportunities for vehicles and raising the cost of used cars and parts.
"It seems arrogant to destroy perfectly good vehicles with many more years of useful life just to entice consumers to purchase a car that they might not be able to afford," said Kathleen Schmatz, AAIA president and CEO. "This is hauntingly reminiscent to the home mortgage debacle when consumers purchased homes they could not afford."
Cash for Clunkers would prematurely destroy vehicles and their valuable parts and components, denying more affordable used vehicles and parts to millions of low and middle income families who cannot afford to purchase a new car even with a $3,000 to $5,000 government voucher.
AAIA is a Bethesda, Md.-based association whose more than 23,000 members and affiliates manufacture, distribute and sell motor vehicle parts, accessories, service, tool, equipment, materials and supplies. Through its membership, AAIA represents more than 100,000 repair shops, parts stores and distribution outlets.
SEMA Press Statement Re: Cash for Clunkers
WASHINGTON, March 30 /PRNewswire/ -- The Specialty Equipment Market Association (SEMA) applauds efforts to help consumers, automakers and dealerships with a program to stimulate new car sales. We support the concept of government-issued vouchers toward the purchase of fuel-efficient new vehicles and allowing consumers to deduct the car interest payments on their taxes.
However, SEMA continues to oppose tying these vouchers to vehicle scrappage programs, known as "cash for clunkers." The programs accelerate the demise of older vehicles, which are then typically crushed into blocks of sheet metal. Scrappage programs focus on a car's age rather than how much it is driven or its actual emissions. SEMA has consistently warned against wasting taxpayer dollars on a program that may produce an artificial spike in sales, but does not reduce emissions or increase fuel efficiency.
Automakers and dealers need to sell cars in order to survive, but potential buyers have hit the brakes in these tough economic times. Scrappage programs actually would deny vouchers to the majority of people who may want to buy a new car but don't have an eligible older car to trade. Instead, these programs will be misused by those who own two or three older cars and seek to take advantage of the taxpayer give-away. Many of these cars aren't frequently driven, if at all, so destroying them will not clean the nation's air or make us less dependent on foreign oil.
While supporters tout a similar German program as evidence of success, the European Federation for Transport and the Environment, (the pan-European federation of environmental groups), has urged Germany and other countries to abandon scrappage subsidies because they do more environmental harm than good by artificially accelerating the car life cycle.
Scrappage programs hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country. This industry provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenues. We encourage the President to help the entire auto industry with programs that focus the incentive where it counts - on the purchase of new vehicles and not destroying older cars.
SEMA represents the $38.1 billion specialty automotive industry. Founded in 1963, the trade association has 7,358 member companies. It is the authoritative source of research data, trends and market growth information for automakers and the specialty auto products industry. The industry provides appearance, performance, comfort, convenience and technology products for passenger cars, minivans, trucks, SUVs, crossovers and recreational vehicles. For more information, contact SEMA at 1575 S. Valley Vista Dr., Diamond Bar, CA, 91765-3914; call 909/396-0289; or visit www.sema.org or www.enjoythedrive.com.