U.S. Stimulus Plan Fails to Generate Auto-Sales

Washington DC March 12, 2009; The AIADA newsletter reported that auto makers anticipating a boost in sales from the Obama Admin.'s $800 billion economic stimulus legislation have been sorely disappointed thus far, as dealers characterize the package as a weak incentive at best.

Wards reports that the American Recovery and Reinvestment Act includes billions of dollars in aid for the struggling auto industry. But the legislation lacks teeth when it comes to spurring auto sales, which plummeted 39 percent last month, compared with like-2008.

Michigan Congressman Thaddeus McCotter last week called on the Federal Reserve and U.S. Treasury to provide dealers with access to the $200 billion Term Asset-Backed Securities Loan Facility (TALF). Says McCotter: "If the American auto industry receives an enhanced bridge loan but cannot sell their cars, our communities will greatly suffer . . . removing financing barriers for auto dealers is essential."

Elsewhere in the world, new government sales-incentive schemes are showing results. In Germany, for example, a scrappage program offers €2,500 for turning in an old car and buying one with better fuel economy. Germany's sales jumped 15 percent on the program in February. Last month, U.S. legislators turned down a scrappage measure.