Britannia Radio

TELEGRAPH    8.4.09
Germany increases car subsidy to ?5bn
Germany is more than tripling the incentives on offer to buyers of 
new cars as it attempts to boost its auto industry, which employs 
around 15pc of the nation's workforce.

By Garry White

The scheme offers German consumers ?2,500 for trading in vehicles 
more than nine years old if they buy a car that is less than one year 
old.
Chancellor Angela Merkel's coalition government, which is facing re-
election on September 27, agreed proposals that will increase the 
amount of government funds available for car subsidies to ?5bn 
(£4.5bn) from ?1.5bn.

The programme was due to expire on May 31, but the government has 
extended it until the end of 2009.  [After the general election ! -cs]

Ulrich Wilhelm, Mrs Merkel's spokesman, said the new funding level 
would cover 2m cars, compared with 600,000 under the previous plan.

The scheme has given a vital boost to German car sales, with new 
registrations in March hitting the highest level since 1992.
"This is a massive election gift. Car dealers and buyers will be 
completely over the moon," said Ferdinand Dudenhoeffer, director of 
the Centre for Automotive Research at the University of Duisburg-
Essen in an interview with Bloomberg.

The news came as German car giant Daimler forecast a "significant 
drop" in full-year revenues and said it expected the crisis in the 
industry would last longer than previously expected. The company 
pushed out its expectations for a recovery in the car market to the 
second half of 2009 at the earliest.

The UK has, so far, failed to introduce a similar programme. The 
Society of Motor Manufacturers and Traders said: "The scheme has been 
extremely successful in Germany and we would like Gordon Brown to 
introduce a similar scheme here."