GM Canada launches ‘cash-for-clunkers’, offers up to C$3,000

16 September 2009 20:41  [Source: ICIS news]

TORONTO (ICIS news)--GM Canada has launched its own “cash-for clunkers” programme, offering buyers up to Canadian dollars (C$) 3,000 ($2,800) to scrap their older, higher-polluting cars, the company said on Wednesday.

The bonus would be offered to buyers of GM cars who qualify under Canada’s federal Retire Your Ride programme.

Retire Your Ride is aimed at taking higher polluting vehicles of the roads, offering qualifying buyers up to C$300 for scrapping their cars. It is administered by Canada’s Clean Air Foundation, with support from the federal government.

However, it is not comparable with the much bigger “cash-for-clunkers” schemes in the US and Germany, which were aimed at reviving slumping car sales during the recession.

Canada was quick earlier this year to join the US in supporting GM and Chrysler, with the federal and the Ontario provincial governments taking minority stakes in the two carmakers, which have about 20% of their North American manufacturing in Ontario.

But despite the importance of the car sector to its economy, Canada did not offer a specific “cash-for-clunkers” stimulus programme to counter slumping car sales and boost car production.

Capacity utilisation in Canada’s automotive and transportation equipment sector sank to 46.0% in the second quarter, down from 46.9% in the first quarter and 59.0% in the 2008 fourth quarter, according to the latest data from Statistics Canada. 

The auto industry is an important downstream market for chemicals and plastics.

A US automobile contains nearly $2,700 worth of chemical products or chemical processing value, according to US chemical industry group ACC.

($1 = C$1.07)

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