Dealers Address Automotive Crisis, Call for a National Vehicle Scrappage Program



    OTTAWA, April 20 /CNW Telbec/ - Today on Parliament Hill, the Canadian
Automobile Dealers Association (CADA) renewed its call for the implementation
of a robust vehicle scrappage program at the federal level. Since November of
last year, vehicle sales have been in steep decline in Canada and all of the
other measures taken in support of the auto industry to date could be for
naught if the demand side of the issue is not addressed. A fleet renewal
program that is more signifigant than the current $300 program would do much
to stimulate sales in Canada.
    "We congratulate the federal government in its recent efforts to
stabilize Canada's auto sector," said Bill Taylor, CADA's Chairman, "but more
must be done to address the issue of declining sales across Canada. Without
robust demand in the marketplace and showrooms full of potential buyers, we
fear that the investments that have already been made may not have the desired
effect of stabilizing the industry."
    Mr. Taylor congratulated the government on the announcement of the $12
billion Canadian Secured Credit Facility (CSCF), from the 2009 Federal Budget.
CADA communicated the need for just such a facility in the pre-budget period,
and the government delivered. Now the program must be designed and rolled out
as quickly as possible, he said.
    "Despite record-low interest rate reductions from the Bank of Canada,
commercial banks have not been open for business for months for our dealers.
This is not acceptable or sustainable. The CSCF should help ease tightening
credit conditions facing Canada's dealers and consumers, but the money needs
to flow immediately," said Mr. Taylor. "If this program were combined with a
fleet renewal program worth $3,000 for the retirement of an old vehicle, the
effect on sales would be immediate. Germany's program, for example - worth
2,500 Euros - has increased sales in that country by some 300,000 units."
    The overriding problem facing Canada's vehicle industry is a lack of
sales. A comprehensive national scrappage program would address this issue by
stimulating additional sales of new vehicles this year. Scrappage programs
remove old vehicles from the road and replace them with new ones, refreshing
the national vehicle fleet more quickly than the unregulated market's rate of
attrition would allow. In addition to the economic benefits stemming from a
healthy automotive retail sector, scrappage programs also offer numerous
environmental benefits and could play an important role in helping our nation
reduce its climatic impact, since older cars pollute as much as 37 times as
much as a new car.
    "An aggressive scrappage program would help achieve much sought-after
dual economic-environmental policy objectives," continued Mr. Taylor. "It
would be the perfect policy to prove that economic growth and environmental
protection are not mutually exclusive. When policies are designed properly,
these important goals can be addressed in conjunction with one another."
    CADA has also urged the government to close regulatory loopholes that
allow several thousand right-hand drive (RHD) vehicles on to Canada's roads
despite the fact that they do not comply with the Canadian Motor Vehicle
Safety Standards. These vehicles pose a risk to Canadian citizens and
undermine the pursuit of Canada's safety and environmental goals. The details
of the RHD safety and environmental concerns are addressed in a new CADA
report.

    The Canadian Automobile Dealers Association (CADA) is the national
association for franchised automobile dealerships that sell new cars and
trucks. Our 3,500 dealers represent a key sector of Canada's economy. Through
our dealers, we are represented in nearly every community and those dealers
collectively employ over 140,000 people across the country.




For further information:

For further information: Kate Poirier, CADA Public Affairs, (613)
230-2079, Cell: (613) 889-3846, kate@cada.ca

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