German scrapping scheme unexpectedly popular

Compared to other European governments, the German Bundesregierung offers a rather generous EUR 2,500 (GBP 2,200) scrapping bonus to anyone trading in an old for a new set of wheels.

The country's "March car sales had jumped by 40% from March 2008, to the highest level since the boom after unification, putting Germany far ahead of other countries," writes The Economist.

"The frenzy is mainly for small cars, the sort that drivers of decade-old clunkers most like to buy. (...) The small-car bias means foreign carmakers benefit more than German ones. In March domestic producers captured just 36% of the bonus bounty, even though their normal market share is over 60%. (...)

"In Berlin sales of French-built Peugeots have tripled."

Kudos go to Germany for its unselfish support of the entire European car industry. Although the industry - at least in the case of Germany - receives a welcome boost, other benefits remain questionable. Governments around Europe and the car industry alike argue that scrapping schemes also benefit the environment. Our columnist thinks otherwise:

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Original article

• Germany’s cash-for-clunkers scheme shows some readiness to spend