German auto scrapping bonus is ending
Thursday, 3 September 2009
FRANKFURT, Sept 2 (AFP): Germany's car scrapping premium was set to expire today after two million buyers took advantage of the government's landmark offer which has boosted the crisis-hit auto sector.
But although the plan has succeeded in keeping domestic auto sales afloat amid the country's worst recession for six decades, 2010 sales could slump heavily because many drivers brought forward purchases to take advantage of the programme.
The subsidy of 2,500 euros (3,550 dollars) for drivers who scrap old cars and buy new ones has especially spurred sales of small cars in Germany, with foreign brands among the main beneficiaries.
Early on Wednesday, a total of 2,748 contracts were still available before the scheme limit was reached, according to economy ministry figures, while demand has surged to around 14,000 contracts per day recently as buyers realised there was little time left.
The car scrapping premium was provided with a budget of five billion euros in February, the equivalent of two million bonuses.
Last month, Finance Minister Peer Steinbrueck ruled out an extension of the plan, telling the Handelsblatt newspaper "I think that it would be a mistake to promise people more subsidies ahead of the (general) election," this month.
Figures for August car sales were due later on Wednesday, but data for July showed that German auto dealers had sold 2.4 million cars since the beginning of the year, or 27 percent more than in the first seven months of 2008.
But although the plan has succeeded in keeping domestic auto sales afloat amid the country's worst recession for six decades, 2010 sales could slump heavily because many drivers brought forward purchases to take advantage of the programme.
The subsidy of 2,500 euros (3,550 dollars) for drivers who scrap old cars and buy new ones has especially spurred sales of small cars in Germany, with foreign brands among the main beneficiaries.
Early on Wednesday, a total of 2,748 contracts were still available before the scheme limit was reached, according to economy ministry figures, while demand has surged to around 14,000 contracts per day recently as buyers realised there was little time left.
The car scrapping premium was provided with a budget of five billion euros in February, the equivalent of two million bonuses.
Last month, Finance Minister Peer Steinbrueck ruled out an extension of the plan, telling the Handelsblatt newspaper "I think that it would be a mistake to promise people more subsidies ahead of the (general) election," this month.
Figures for August car sales were due later on Wednesday, but data for July showed that German auto dealers had sold 2.4 million cars since the beginning of the year, or 27 percent more than in the first seven months of 2008.