'Cash for Clunkers' scheme could revive US car market, and drag the global industry with it
The US car market's crippling four-year decline in new car sales could be over, after initial results of the US government's 'cash for clunkers' scrappage scheme proved promising.
The initial $1 billion (�590m) allocated by the US ran out in six days (meaning a boost of 200,000-250,000 sales), but the House of Representatives has already approved an extra $2 billion (�1.2bn) for the scheme.
If the rush of pent-up demand continues, it could be the sales stimulus that the global car industry so desperately needs. The US might be about to cede its status as the world's largest car market to China, but it's still a hugely significant marketplace, particularly for high-end vehicles (think Jaguar, Land Rover, Aston Martin or BMW). In short, a healthy US car market means a healthy global car industry.
Analysts are still cautious, but US car sales, which dive-bombed in the first half of 2009 to their lowest levels since the early 1980s, look likely to rally in the second half of the year.
Mike Jackson, former CEO of Mercedes North America and now boss of AutoNation, the largest dealer group in the US is confident that 'Cash for Clunkers' would boost the US auto industry, but that it was too early to quantify the impact.
'This is the kind of buyer that comes to market once in a decade. They buy these things and keep them forever,' Jackson says. 'It really is incremental business and that's why it's a brilliantly conceived stimulus program.'
Not quite 'green shoots' but, to paraphrase Churchill (not the nodding dog), it might at least be the end of the beginning.
No comments:
Post a Comment