An idea fit for the scrapheap?

No Comments » Written on August 6th, 2009 by
Categories: Germany
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As a measure to fight the worldwide economic crisis and to support local car manufacturers, the German government introduced a scrapping premium of EUR 2,500 for cars older than 9 years.

While this has led to a short term increase in car sales, it has also had (or will have) a number of negative side effects that politicians failed to see:

  1. Independent researchers and industry experts predict a dramatic slump in car sales for 2010 when the premium programme will finish, with the risk of numerous bankruptcies among franchised dealers.
  2. It has become virtually impossible to find cheap second-hand cars in Germany, making life hard for low-income families, students etc.
  3. Second-hand car exports from Germany to Africa are at a record low, opening up this highly interesting market for other economies.
  4. Workshops specialising in the maintenance of older vehicles are losing business.
  5. Spare parts manufacturers are facing hard times, not only because of the dramatically reduced number of old cars on the road, but also due to an oversupply of second-hand spares from scrapped cars.
  6. Foreign brands (mostly French and Japanese) managed to secure more than 50 per cent of all premium-related car sales.

Update on 08/08/09:

German industry experts estimate that more than 50,000 cars that should have been scrapped were illegally shipped to Third World countries instead.

Knowing the mentality of scrapyard owners and second hand car dealers, it was so painfully obvious that this kind of thing would happen, but German politicians can be so naive and gullible at times, it is unbelievable… Some of them even lose their armoured S Class Mercedes while holidaying in Spain…

Jochen from Bremen, Germany

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