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Archive for June, 2009

'Cash for Clunkers' underway

The controversial ‘Cash For Clunkers’ scheme has been signed off by President Obama in the USA.

Under this scheme the US Government will help buyers pay for a more fuel efficient car or truck if they trade in a less fuel efficient vehicle.

Whilst it has been widely welcomed by the motor trade it does have its detractors.

A generous trade-in allowance will be applied to the used vehicle, but conditions apply, and that’s where the controversy sets in.

In simplified terms, here’s what happens

1.

The trade in vehicle must be between 8 and 25 years old.

2. The trade in vehicle must have a fuel economy of 18 mpg or less

3. The trade in vehicle must be scrapped.

4. The new vehicle cannot have a recommended price exceeding $45,000 US.

5. The new vehicle must have an economy value of at least 22mpg (cars), or 18mpg (smaller trucks).

If the new vehicle rates at 10mpg better than the trade in then the Government will give the customer $4500 for the scrapped vehicle.

This is a temporary measure, but it has been much applauded by the motor trade as an effective and greenie friendly stimulus package.

However it does have its detractors.

The detractors say:-

1. It’s wrong to include imported new vehicles in the scheme, it should solely promote local manufacturers.

2. It encourages exactly the wrong people to participate, those with old, virtually worthless vehicles and they can’t afford a brand new vehicle. 

3. The special allowance is more than compromised by the greenhouse emissions impact of making a new vehicle.

4. The cost is far too much to benefit far too few.

But, of course, the US car producers are in such dire straights that any initiative will be warmly welcomed, and this is one of them.

Will it spread to Australia?

Well, Germany already has a similar stimulus, and it’s pretty certain that these schemes will be closely monitored by the Australian Government, but, as such a high proportion of our cars are imported, a similar scheme would be unlikely to produce such a profound benefit.

What’s Happening At Holden?

Bankrupt?

 Closing Down?

Lost export orders?

Being sold off?

We’ve heard all the rumours and speculation from scaremongers following the parent company’s problems in the USA.

But how does it impact on Holden in Australia?

General Motors in the US has filed for bankruptcy protection, and the Obama administration (along with its Canadian counterpart) plan to take a controlling stake in the company prior to it emerging from bankruptcy protection in about three months.

A leaner, streamlined GM will re-appear after serious surgery.

Part of this cost-cutting programme is the proposed sell off of its European brands, Vauxhall in the UK and Opel in Germany.

They have also cancelled a big export order from Holden for Pontiac cars bound for the US.

But Holden are still very much upbeat!

Their managing director, Mark Reuss, has told the press that Holden is not for sale!

It has NOT been put on the market and they are not entertaining any offers for the company- at least in the near future.

In fact, Holden are currently gearing up to produce their most important small car in their history, the Holden Cruze.

Launched this month, the Cruze will initially be imported from GM’s manufacturing plant in Korea, but it is slated for local production in 2010 alongside the Commodore.

The pricing for the Cruze is extremely competitive and reflects Holden’s determination to make a mark for the car in Australia, and stay here for the long term.