German automakers call for 'cash for clunkers' sequel

Germany-based auto producers are asking that nation’s government to consider reprising a “cash for clunkers” trade-in incentive program similar to ones that were put in place after the 2008 financial crisis.

According to an April 17 Reuters report, the Verband der Automobilindustrie (VDA) and its president Hildegard Mueller has asked lawmakers to enact “economic support measures” to revive the nation’s demand for vehicles as it begins lifting COVID-19 virus-related restrictions.

Premier Markus Soeder of Bavaria, where BMW is headquartered, has reportedly backed the idea. “I think it is necessary to develop a model similar to the scrappage scheme in order to give a massive boost to domestic demand,” Reuters quotes Soeder as saying.

He was joined in that sentiment by Stephan Weil, the premier of Lower Saxony, the home of Volkswagen. Reuters quotes both regional premiers as indicating they are in favor of a system that incentivizes the purchase of alternative fuel and hybrid engine vehicles in particular.

“Let’s be quite honest; all the new engines have not yet been as successful on the market as we thought,” says Soeder. “Now is the chance to start a project in which we can promote cars in Germany with an innovation premium.”

Data collected by the Brussels-based European Automobile Manufacturers' Association (ACEA) showed an unprecedented 55 percent decline in new passenger car registrations in Europe in March 2020 compared with March 2019. That data included a 38 percent drop in registrations in Germany, while Italy faced an 85 percent decline, France a 72 percent drop and Spain a 69 percent plunge.

Trade-in programs, such as the 2009 one in the United States informally known as “cash for clunkers,” seemed to have helped drive some traffic into auto showrooms at that time and may also have helped drum up business for the auto salvage and shredding sectors.

Neither the Washington-based Alliance for Automotive Manufacturers nor the Manassas, Virginia-based Automotive Recyclers Association (ARA) has broached the subject of a 2020 “cash for clunkers” program on their websites as of late April.