The prospect of Germany offering incentives to boost new-car sales was dealt a blow after a poll found that most people oppose the idea.
The survey was conducted on May 4-5, just as Volkswagen Group, Daimler and BMW Group were meeting with Chancellor Angela Merkel's government to ask for a 4,000-euro state subsidy on the purchase of a new car.
The automakers' request was supported by Markus Soeder, prime minister of Bavaria, home to BMW and Audi. Soeder said automakers are the workhorse that pulls Germany’s manufacturing base.
Deespite the requests, the German government postponed a decision on whether to offer incentives has been postponed until June.
Public sentiment is overwhelmingly against the idea, a Deutschlandtrend survey conducted found. The opposition comes even though government funds would only indirectly benefit automakers.
Asked whether they would support using taxpayer revenue to fund new-car purchases, 63 percent said they opposed the idea, while 12 percent favored it.
More than a fifth of respondents said they would only back incentives if they were for low-CO2 cars such as electric vehicles.
While opposition to incentives cut across party lines, the respondents who were the least hostile to the idea, with only 57 percent against, where from Germany’s union-friendly Social Democratic Party.
Media headlines such as “Should an Aldi cashier finance car scrapping schemes” have cast incentives in a negative light, making it harder for automakers to win public support for the subsidies.
One proponent of incentives, however, is Marc Odinius, who is CEO of market researcher Dataforce.
He says the car scrapping scheme used by Germany in 2009 to offset the global financial crisis successfully boosted private retail demand. By his calculations an extra 1.14 million new vehicles were registered as a result of incentives. He argued this was pure incremental added volume, as private demand did not sink below 2008 levels the following year. That would have been a clear indicator at least some demand had merely been pulled forward.
“The scrapping incentive worked even better than believed,” he wrote on LinkedIn.
The automotive industry contributes roughly 138 billion euros to Germany's GDP and accounts for roughly a fifth of overall goods manufactured by value, according to the latest figures from the country's statistics agency.