Remember when everyone in the car world was running around like something from a biblical epic, gnashing their teeth, wringing their hands, because they thought that judgment day had arrived and this was it, the auto world was coming to an end. Well, tell that to the Germans. While car sales in America are still in the “not so good” territory, German car sales went UP by 19.4 percent in April. That rise compares with a frightening 37.4 percent drop for U.S. car sales in the same month.
Analysts believe that the bump in sales for Germany is largely due to the government’s incentive scheme to scrap old cars and buy new ones that was introduced in February, what is termed here in America as a “cash for clunkers” program. The 19.4 percent up-tick in April, which translates to about 380,000 units, followed a 40 percent leap in car sales in March to around 401,000 units. New car sales in Germany during the first four months of the year are at their best level since the record year of 1999.
The German clunkers program pays owners about $3,370 to junk vehicles at least nine years old if, and this is a big if, they go and buy a new car from any automaker in exchange. The scheme appears to have significant environmental benefits as newer, cleaner and of course, more fuel-efficient models replace older vehicles with higher CO2 emissions. German sources say that emissions from the cars registered in Germany during the first quarter of the year were down by around 6.5% over a year ago.
Now, whether a cash for clunkers deal will even happen here in the U.S., let alone have a net positive effect is anyone’s guess at this point.