US Passes Scrappage Scheme Bill
The US senate dotted the final “i” on its “Cash for Clunkers” scheme – an answer to the UK’s own scrappage deal dubbed, with equal panache, “Bangers for Cash” – on 19 June. The scrappage bill will allocate $1 billion for vouchers worth between $3,500 and $4,500 when a customer trades in an old vehicle for a new one. However, unlike the British government’s reliance on customers to make the decision to buy more ecologically friendly products, the US programme is contingent on the fact that the traded-in vehicle achieves 18mpg or fewer and the new one supersedes the original figure by 4mpg (car), 2mpg (small truck or SUV) or 1mpg (large truck or van).
Deutsche Bank reports estimate that 28 per cent of the relevant US car parc will qualify for the deal, while it also calls the potential benefits to the US auto industry “relatively modest”. It continues, “Given the fact that most eligible vehicles will be trucks, we believe that a disproportionate benefit will accrue to the US automakers (and to suppliers such as American Axle).”