PSA: More Cash4Clunkers, or Else
While French workers take hostages, French companies do a little extortion: “PSA Peugeot Citroën has warned that its 2009 operating loss could reach €2bn if France does not renew its cash-for-bangers scheme, due to expire later this year,” the Financial Times reports. Without “cash-for-bangers,” as the Brits call their clunker culling program, Peugeot will scale down fourth-quarter production, anticipating an utterly awful 2010. Jobs will be lost, red ink will be all over the place. The FT rightly assumes that PSA’s “mutterings may be intended to press the French government to continue the plan.” Can the French possibly say non?
FT thinks that cash4clunkers will remain a European fixture: “In fact, France, Germany and others will almost certainly maintain such schemes into 2010—though Germany may trim its over-generous incentives. After all, they are having a powerful effect on spending and automotive employment.” German new car sales jumped an extraordinary 40 per cent year-on-year in May, and are up 22 per cent year-to-date. Germany’s new cars sales for 2009 are predicted to rise by around 20 percent to 3.6 million cars, only to plummet by 22 percent to 2.8 million units sold in 2010—if the Abwrackprmämie is discontinued. French car sales increased 12 percent in May, and are down only 1.4 percent this year. FT remarks that the “schemes’ net costs appear somewhat limited by increased value added tax receipts and reduced unemployment costs.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The French and the Japanese have always been big on forcing people to junk their old cars. Not a good idea.
Austin: Kindly send me a picture of a close relative, we'll photochop it and will gladly exchange it.
Bluecon: I'm in China. Send PETA on over. They'll have their hands full.