SEMA eNews Vol. 12, No. 13, April 2, 2009

SEMA Urges President Obama to Oppose Vehicle Scrappage Programs

President Obama and his Auto Task Force initiated a series of actions to help rebuild the U.S. auto industry. In an open letter to the President,
SEMA expressed a continued commitment to work with the President and
the U.S. Congress toward that goal. SEMA also expressed its opposition
to vehicle scrappage programs, also known as “cash for clunkers."

President Obama mentioned a willingness to consider including such a program within his auto restructuring plans. 

In the letter, SEMA discussed the need to help consumers, automakers
and dealerships with a program to stimulate new car sales. Assistance
could come in the form of government-issued vouchers toward the
purchase of fuel-efficient new vehicles, and allowing consumers to
deduct the car interest payments on their taxes. SEMA, however,
strongly opposed tying the vouchers to a scrappage program.  

Scappage programs accelerate the demise of older vehicles, which are
then typically crushed into blocks of sheet metal. Program supporters
focus on a car's age or fuel efficiency rating rather than its actual
emissions or how much it is driven. SEMA has consistently warned
against wasting taxpayer dollars on a program that may produce an
artificial spike in sales, but does not reduce emissions or increase
fuel efficiency. 

Automakers and dealers need to sell cars in order to survive, but
potential buyers have hit the brakes in these tough economic times.
Scrappage programs would actually deny vouchers to the majority of
people who may want to buy a new car but don’t have an eligible older
car to trade. Instead, these programs will be misused by those who own
two or three older cars and seek to take advantage of the taxpayer

Many of these cars aren’t frequently driven, if at all, so
destroying them will not clean the nation’s air or make us less
dependent on foreign oil. 

While supporters tout a similar German program as evidence of
success, the European Federation for Transport and the Environment,
(the pan-European federation of environmental groups), has urged
Germany and other countries to abandon scrappage subsidies because they
do more environmental harm than good by artificially accelerating the
car life cycle. 

Scrappage programs hurt thousands of independent repair shops, auto
restorers, customizers and their customers across the country. This
industry provides thousands of American jobs and generates millions of
dollars in local, state and federal tax revenues.

SEMA encouraged the President to help the entire auto industry with
programs that focus the incentive where it counts: on the purchase of
new vehicles and not destroying older cars. 

Read SEMA's letter to President Obama.

For more information, contact Stuart Gosswein at

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