http://personalisedpoems.org/american-government/
American Government
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Will Government Scrappage Schemes Save the Car Industry?
The American Government is taking its lead from countries in Europe and proposing a ‘cash for clunkers’ scheme to try and encourage buyers back into the struggling car market. The scheme will offer an incentive of up to $4,500 to owners of old cars getting 18 miles per gallon (mpg) or less if they upgrade to a vehicle that gets at least four mpg more, so people could trade in a gas-guzzling 4x4 and buy a Honda, Nissan or other smaller more efficient car in its place. The idea is that the chance of getting money back on purchasing a more efficient car will help persuade consumers that it is a good idea, but can a scheme like this really work in the long run?
A similar incentive was introduced in the UK in May, where the government and car manufacturers are giving consumers £2000 towards a new replacement vehicle in exchange for scrapping ones over 10 years old. Since the scheme began it has taken over 35,000 orders, not enough to reinflate the car industry but enough to make their efforts worth it so far. The question is how long will it last, when progressively less and less car owners will still be eligible and the money for the incentive starts to run out. Recent predictions by a chief executive at French automakers Renault suggest that the time of crisis will continue for few years yet, and that the numbers of people wanting to buy a Renault were unlikely to return to normal levels any time soon. So although government cash incentives are succeeding in coaxing buyers back into the market in the short term, it could be an even bigger blow for manufacturers if the orders stop coming in before the recession is over.
And obvoiusly it's not only motoring that has been hit by the global recession, money is tight for everyone. Giving consumers a cash incentive is a good idea but the amounts available are only a small percentage of the cost of a new car. It’s not as if you could trade in your old banger and buy a new BMW in its place, and a lot of people just wouldn’t consider making such an expensive purchase when they’re already struggling with debt and the uncertain economic climate. The cash incentives are a temporary answer but should help to rebuild public confidence in the car industry, and should also help to enable people who could only have considered buying second hand to look at new cars instead.