Wednesday, March 11, 2009

A better bailout strategy for car manufacturers-Incentive to buyers

Incentives, not bailout
OTTAWA (UPI) -- The Canadian government has been urged by a second automaker, Toyota Canada, to skip bailout measures and instead create buying incentives.

Speaking to a House of Commons committee Tuesday night, Toyota's Managing Director Stephen Beatty said it would be preferable to implement tax incentives or "holidays" to spur sales, the Globe and Mail reported.

"If the government wants to help the manufacturing activities of the auto sector, the best way to do that is ensure there's a healthy market for their products," Beatty said. "The fastest and most effective way to do so is to create immediate access to credit."

A night earlier, Ford Canada's chief, David Mondragon, urged the same committee give a $3,500 voucher for scrapping cars older than 11 years and buying a new car to create stimulus in the wallowing industry.

This is a strategy that would increase return on public dollars - it would reduce the excess car inventory,provide needed cash flow to the manufacturers solving the immediate cash flow crisis problem. It is immediate . It is a direct win for the consumer or bailout funders, a win for the car manufacturer by providing needed cash flow through the sale of excess car inventory , a win for the government as it protects the manufacturing jobs /tax base and stimulates the economy immediately. A end user inentive is a win-win-win strategy PR

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