Car makers urge feds to help people buy more cars
Published Friday, June 5, 2009 10:51AM EDT
OTTAWA - Car makers and dealers are urging the federal government to spend $350 million to get people to scrap old clunkers and buy new vehicles.
They say the government should offer people $3,500 when they trade in a car that's at least 10 years old and buy a new one.
It's an expansion of the existing retire-your-ride program, which pays $300 for each scrapped car.
Mark Nantais, head of the Canadian Vehicle Manufacturers' Association and Richard Gauthier, president of the Canadian Automobile Dealers Association, say the bigger program will help boost consumer confidence.
They also say that getting older cars off the road is a boon for the environment, because they pump out far more pollution than new vehicles.
They expect a richer scrappage program would get up to 100,000 old cars off the road.
Gauthier said car sales in Canada are off 20 per cent this year.
Germany brought in a $3,800 scrappage incentive this spring and new-car sales subsequently rose dramatically.
Gauthier said the $300 retire-your-ride incentive is just too small to be effective in spurring new auto sales.
"It's enough to buy a bicycle," he said.
He and Nantais said their proposal isn't as expensive as it looks. For one thing, the government could roll in $92 million money already allotted for retire-your-ride over the next three years. For another, the government would reap millions in GST on the sales of new cars.
They say the program should run for a year, or until the $350 million runs out, whichever comes first.