Saturday, February 28, 2009

Here's an interesting idea -Germany's 'Scrap' Bonus Fuels Car Sales

Germany's 'Scrap' Bonus Fuels Car Sales -
"BERLIN -- Around the world, some economists and governments have their doubts about whether costly fiscal-stimulus measures will work. But in Germany, one measure already is a roaring success.

Germany's €2,500 ($3,200) subsidy for people who scrap an old car and buy a new one has triggered a stampede to dealerships and a run on small cars. It's also inspiring retailers of other products, from electronics to false teeth, to copy the idea."
. . .
"It's a real sales boom," says Ceyhun Tan, a Volkswagen dealer in Berlin. He says his February sales are two to three times as high as a year ago, thanks to the scrap bonus. Most of his new wave of customers, says Mr. Tan, are elderly people whose ancient autos are worth less on the used-car market than the scrap bonus.

. . .A survey by research institute Forsa found that of 16 million Germans who own a sufficiently old car, 1.2 million people firmly plan to use the scrap bonus and many more are thinking about it. Many may be disappointed: The government plans to reward only the first 600,000 new-car purchases.
Here's the part that might be appropriate.
Electronics retailer Media Markt offered computer buyers €100 for their old PC for a limited time this month. Upscale tailors Herr von Eden is offering clients up to €300 for their old suits if they order a new one.
It seems a neat way to lower prices for a brief period and keep the perception of value steady for the long run. Plus a way to build loyalty with present customers.

1 comment:

  1. Thanks for your great information, the contents are quiet interesting.I will be waiting for your next post.
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