The German car industry is calling for a new ‘cash-for-clunkers’ program to be introduced to help encourage the sales of new vehicles.
The nation’s export-driven car sector has been hurt due to shutdowns around the world because of the coronavirus.
Volkswagen and Daimler will gradually restart output in European factories this week but it could prove to be a long road to recovery, particularly since car sales across Europe dropped by the most on record in March.
During the last financial crisis of a decade ago, Germany rolled out a scrapping program encouraging people to trade in their older vehicles for new ones. It proved hugely beneficial and helped the economy quickly recover.
VW brand chief operating officer Ralf Brandstatter told Bloomberg that “sales support can be a sensible contribution to climate protection,” suggesting a new cash-for-clunkers program could specifically encourage the sale of more environmentally-friendly vehicles.
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The leaders of the German state where the likes of BMW, Daimler and VW are headquartered have expressed their desire to see the government provide support to the car industry.
It is understood that top industry officials and labor unions will meet on May 5 with the German Chancellery in Berlin to discuss ways to overcome the economic crisis. While Berlin isn’t ruling out a cash for clunkers scheme, it doesn’t currently have a plan for it.
“There are currently different demands and proposals from the automobile industry,” an Economy Ministry spokeswoman said. “We follow them closely of course. But there is currently no decision yet.”
German economy minister Peter Altmaier acknowledged that the car industry is facing challenges but has yet to commit to any kind of financial support.
