German Carmakers Want New Cash-for-Clunkers Scheme

BERLIN—The German car industry is in dire straits—and asking the government for help.

Amid the economic fallout caused by the CCP virus pandemic, the country’s top industry has seen demand plummet. While automakers have reopened factories, about half of its approximate 800,000 employees are still furloughed.

In April, production and exports shrunk by 97 and 94 percent, respectively, compared to last year. Car sales dropped by 61 percent.

Car dealers in Germany reopened two weeks ago, as part of the first phase of easing the lockdown measures. But they have made few sales since then.

The industry wants to have a cash-for-clunkers scheme to boost demand, which was already used during the 2007–2009 recession.

Such a scheme gives taxpayer-financed discounts to consumers who trade in old vehicles for new ones.

The CEOs of VW, BMW, and others argue the auto industry is paramount for Germany’s economy to recover.

There are many critics of using the cash-for-clunkers scheme, including within the government. They say they would only agree to stimulus measures for the car industry if it leads to more electric vehicles on the road.

“We cannot have a scrappage bonus like the one we had in 2008. … It must be a targeted program that really helps to bring about a new start in the car industry,” said Svenja Schulze, Germany’s environment minister.

Chancellor Angela Merkel’s government met with carmakers earlier this week. The government said it would make a decision about whether or not to use the scheme by early June.

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