The German government will make no more funds available for the country’s vehicle scrappage incentive which has helped sales rise steadily this year.
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Government spokesman Thomas Steg said there would be no increase to the EUR5bn ($7bn) now in the budget, which was boosted in April from its original EUR1.5bn. He added: “We had intense discussions in April to decide to raise this to EUR5bn knowing full well this sum may be exhausted before the year ended.”
The popular incentive programme gives new car buyers a EUR2,500 (US$3,528) rebate for scrapping cars that are at least nine years old. The Federal Office of Economics and Export Control said that as of 8 July, 275,473 rebates were still available out of the 2m envisioned since the plan was introduced and topped up in April.
Earlier this month, car makers’ association VDIK reported that new car sales continued to surge in Germany last month as volume rose 40% year on year to 427,000 units. First half registrations were 26% ahead of 2008 at just over 2m units.
VDIK said the increase in Germany compared with declines elsewhere in Europe showed the usefulness of the scrappage incentive. But it cautioned it did not expect growth to continue at the same pace in the second half.
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