Stimulus plans - US launches cash incentive program for auto sales
Reuters reported that US government has launched a USD 1 billion cash incentive program to stimulate auto sales by getting consumers to part with gas guzzling cars and trucks and buy more fuel efficient vehicles. The program, which offers up to USD 4,500, will be overseen by the Transportation Department.
Congress approved the program to help the US auto industry after handing out billions of dollars in bailouts and the bankruptcies of General Motors Corporation and Chrysler Group.
Efficiency terms established by the Transportation Department are narrow enough to help GM, Chrysler and Ford Motor Co, sell their bread and butter pickups and sport utilities, even though passenger cars as a class get better gas mileage and give off fewer carbon emissions.
Overseas automakers like Japan's Toyota Motor Corporation and Honda Motor Co dominate sales of fuel efficient passenger cars in the United States. The government estimates the program will help finance up to 220,000 new car purchases or about 12 per dealer in the United States. The program is not expected to boost manufacturing output unless it is extended beyond USD 1 billion.
Congress has not ruled out additional funding if the program is successful.
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