U.S. ‘Cash-For-Clunkers’ Proposal May Cover Cars From Overseas

[Purveyor]

By John Hughes

April 17 (Bloomberg) -- U.S. lawmakers may let cars made overseas qualify for a proposed “cash-for-clunkers” program in a bid to secure passage of the measure, designed to help revive domestic auto sales at a 27-year low.

An option under consideration would distribute subsidies to new-car buyers based on manufacturers’ U.S. market share, said Representative Betty Sutton, sponsor of the proposal. The approach may overcome objections that Sutton’s original plan subsidizes North American-made products only.

“There are a lot of ideas out there on the table and certainly we’re exploring them,” Sutton, an Ohio Democrat, said in an interview yesterday. “I’ve always been open to finding mechanisms, avoiding wrinkles, if people have differing views.”

Spurred by the success of a similar program in Germany, backers say they want to speed the measure through Congress soon after it returns from a recess next week. The goal is to stoke sales at automakers including General Motors Corp. and Chrysler LLC, which are surviving on taxpayer aid and face bankruptcy deadlines imposed by the Obama administration.

New autos sold at an annual rate of 9.86 million units in March, the slowest pace since 1982, according to Autodata Corp. of Woodcliff Lake, New Jersey. The rate averaged 16.8 million this decade through 2007.

“What I have been looking for is a solution that would treat all manufacturers fairly,” Representative Edward Markey, the Massachusetts Democrat who crafted the market-share idea, said in an e-mail. “I am hopeful that this could prove to be a constructive way forward that all sides could agree on.”

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BLOOMBERG: http://www.bloomberg.com/apps/news?pid=20601109&sid=arRGEXPmOojA&refer=home

[screembloodymurder]

1. Great, but until it passes, this bill threatens to delay auto sales.

Congress should shit or get off the pot.

[LeftHander]

2. Bank execs can buy cars....the rest of us can't....

[marketcrazy1]

3. if this money is doled out by market share

then most of it will go to foreign manufacturers who as a group built 3.7 million of their cars right here in America after importing 3.4 million. with total U.S. auto sales currently projected at 9.8 million, more than 2/3rds of those sales will be foreign cars.............. though it would certainly provide SOME help to American car companies it might not be as much as people think..

[Kalyke]

4. I hope not.

Americans need to get over the 1980s and realize American cars are as well built and cheaper to purchase and maintain than their foreign counterparts.

A bill helping Americans buy American cars (built here, profits stay here) would help a lot of Americans realize we no longer live in the era of big hair, techno-pop and bad American automobiles.

[Spike89]

8. Lot's of good reasons to buy american, profits not so much

I hear this one so much...the profits stay here...and it almost makes sense. The reality is that Chrysler, GM, and Ford are not people, they are corporations. They are multinational corporations. The profits are only barely more likely to stay in the U.S. and fuel investment here than the profits that Toyota makes.

I'm not saying buy foreign, just that I wouldn't count on the corporate profits generated by an uptick in domestic sales not going to fund a new production line in Mexico, Europe, or Asia.

[Historic NY]

5. Must be a lot of Rolls Royce's & Mercedes Benz & Ferrari's that need to be turned in.

[maxsolomon]

6. Do we believe in Climate Change or not?

The government subsidizing new car purchases tells me we don't.

It's more sustainable to NOT manufacture a new thing, and instead keep using a perfectly functional machine. My 1991 Saab 900S is not a "clunker", and it gets mileage as good as most new vehicles of its class. And it's prettier.

[Javaman]

7. Shhhh...you are just sooo ruining the buzz on recovery!

I always buy used just for the reason you state.

My '96 jeep keeps on going. And I won't get anything new until the vehicle is 100% recyclable and it runs on electric only.

I feel I have a long wait. LOL

[cdsilv]

9. have not bought new and won't until new costs $5,000 or less....

so I can buy with ca$h. No more buying something on credit that can be turned into junk in less than a second...

[Javaman]

10. Excellent point..

I feel the same way.