Car sales are very depressed but there may be hope yet for the car makers and, by extension, the economy. It appears there is a move a foot around the world for governments to give owners of old cars (10-years-old or more) an inventive of several thousand dollars to trade in their clunker for a new car.
As blogger Canadian Financial DIYreports, Germany went this route several months ago. And it looks like its auto trade-in incentives are lighting a fire under German car sales: recent data show a jump to levels not seen in over ten years — see the rather steep rise in the chart below from The Week Ahead publication of CIBC World Markets.
The U.K government has a similar incentive program in its budget. And there are some bills now going through the U.S. Congress that promise to give cash to U.S. consumers who turn in their old cars for new ones.
Maybe shares in car companies will be quite rewarding over the next year or so –especially so with the recent resolution of insolvency concerns at GM, Chrysler and Ford? As well, a pick-up in auto sales and production levelscould help the economy regain its footing.
Not much appears to happening on this front so far in Canada (there is however a program in B.C. currently). But maybe one will be put in place given the wave of other countries going in this direction. Just don’t leave it too long — I’ve got an11-year-old beater to replace.