August 5, 2009

The German Experience With Cash for Clunkers

Curious Capitalist, Curious Capitalist

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From Zeit Online (clunky translation mine):

In Germany the government-promoted auto boom is gradually coming to an end. Thanks to cash for clunkers (Abwrackprämie) the number of new-car sales in July was, at 340,000 vehicles, still 30% higher than the previous year's level, reported the Federal Motor Vehicle Office (Kraftfahrt-Bundesamt) Tuesday in Flensburg. In June, however, the increase amounted to 40%.

Experts project that the politically engineered demand peak has passed, and in 2010 a collapse will follow. Altogether the government set aside 5 billion euros ($7 billion) to promote the purchase of new cars. According to researchers in Regensburg, that money-pot will empty not long before the Bundestag election (Sept. 27). At the moment there's enough money left for...

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TAGGED: Automobile Industry

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