The Slovak government has said it would extend its auto trade-in bonus scheme aimed at boosting new car sales after its funding ran out last week due to intense demand.
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The scrap-for-new scheme sparked such interest that car dealers ran out of the allocated EUR33m ($US44m) much sooner than expected, with 4,200 cars already scrapped without the bonus being paid to their owners, AFP reported.
“I would like to assure the people who got their cars scrapped last week that they will get the bonus as well,” prime minister Robert Fico said, adding that the new package might be re-launched next Monday.
More than 22,000 cars older than 10 years were scrapped under the scheme, introduced just three weeks ago and mirroring similar subsidies in France and Germany, with a payment of up to EUR2,000 per vehicle.
The measure was approved as part of Slovakia’s anti-crisis measures to try and halt the slump in new car sales.
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By GlobalData“Under certain conditions, the scrapping-incentive scheme is financially neutral for the state,” Fico said, citing income from value-added tax on new cars.
But analysts said similar steps taken by other European countries have helped Slovakia where the auto industry is based around plants owned by South Korea’s Kia Motors, France’s PSA Peugeot Citroen and Germany’s Volkswagen.
Car production, the driving force of the former communist country’s economy, plunged 47.7% in January while auto exports fell 29.9% as demand slumped amid the global economic crisis, AFP said.
