German Scrappage Out of Funds by September 10

Sad news for the German automotive industry, as the Centre for Automotive Research in Duisburg-Essen reported the 5 billion euro fund keeping the country's scrappage incentive  is running out. According to their estimates, the money is enough to last until September 10, faster than initially predicted.

"Everyone was surprised it went this quickly," Ferdinand Dudenhoeffer, the center's director was quoted as saying by Bloomberg. "Two million applications really are a whole lot, and nobody could even predict that the entire fund would get emptied."

The center calculated the remaining money by multiplying the 95,000 available applications by the 2,500 euro rebate and than dividing the result by the average value of applications each working day. So far, the scrappage incentive has managed to boost Germany's new car sales by 23 percent year-on-year

"We will still see a sales increase in November because there is a pile of applications that has not been cashed in," Dudenhoeffer added. "But next year, demand will drop."

When the funds will run out, Germany will be left without one of the most successful scrappage schemes in the world. According to government spokesman Ulrich Wilhelm, there will be no extension to the country's scrappage scheme past the funding currently allocated, nor is an alternative scheme prepared.

Still, some kind of support for the industry may be provided, as rumors surfaced the coalition ruling in Germany are trying to set up tax incentives for auto workers who buy cars, in the hope that by doing so, the expected market decline will be stopped.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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