Light at the end of the tunnel for the automotive industry?

The automotive industry all over the world is still suffering from the crisis and everyday we are flooded with the statics and news, connected both with new and used cars, that confirm its weakness. The spirits are low, however, there has been one good piece of news lately...

Despite the fact, that in most countries the situation in the industry is getting worse as the car dealers report, in Germany the situation is actually getting better and the sales numbers have increased noticeably. In fact, this February was the best for new car sales in Germany in ten years, with and  increase of 21% . Moreover, the improvement can also be seen in the used cars market.

How come? It seems that the rescue plan for the automotive industry introduced by the German government has proved to be effective. The main point of the scheme is to offer a bonus of €2500 to each person buying a new car on condition that the potential recipient would trade in a car older than 9 years. The idea has gained popularity quicker than expected and made the demand for new vehicles exceed the supply and also have given a boost to the market of used cars.

This positive news has inspired the Society for the Irish Motor Industry. They  are now calling on the Irish government to introduce a similar scheme. The situation in the Irish market of new and used cars is unfortunately still depressing, the latest statistics show the new vehicles sales in the first 2 months of 2009 decreased by 65 percent. No wonder, that the action of the government is expected. The scrappage scheme could be similar to the German one  - with a grand given on condition that a used car will be traded in. We shall soon see if there are some chances to introduce this idea in Ireland.