The governments of European countries like Germany, France and UK are offering incentives to people who exchange their old cars for new, fuel - efficient ones under the Cash-for-Clunkers program.
The scrappage policy in Europe gives Rs 50,000-350,000 to people buying fuel efficient cars which has led to an increase in demand for small cars from Indian manufacturers like Hyundai Motor India & Maruti Suzuki. The former which is India's largest car exporter recorded its highest export growth rate last month.
Thanks to booming exports, Hyundai's production schedule for exports is already booked for the next two months and the company is now looking at bagging orders for September and beyond, helping the company post handsome profits. This is likely to help the company that recorded a loss of Rs 87 crore in the quarter ended March due to currency fluctuations.
-> Germany has set aside €5 billion to make the country ecofriendly by encouraging fuel-efficient cars. Those exchanging big cars for small fuel-efficient ones will get €2,500.
-> Spain will barter two lakh cars by giving €2000 in cash to people exchanging fuel guzzlers.
-> France offers an incentive of e1000 with deferred tax benefit of up to e5,000 on each car with carbon dioxide emissions less than 160 gm/km.
-> Italy is extending a €3,000 payout for all new cars emitting carbon dioxide below 130 gm/km.