Do Consumer Incentives Bring Buying Forward?

The following article by Nancy Phillips of Nancy Phillips Associates was featured in Automotive Dealers Network's October 2010 e-newsletter. Nancy is a regular contributor to the publication.

Auto Industry Lessons:

Do consumer incentives like 'Cash for Clunkers' and 'Scrappage' bring buying forward?

by Nancy Phillips

The beautiful country of Ireland is roughly the same size as the state of Maine and has a population of around six million as does, for comparative purposes, the state of Massachusetts.

Some would say that economic trends in the European Union are ahead of the United States. If we believe this, then studying what is going on in Ireland today may indicate that the remission we are currently experiencing here could be followed by another period of decline.

Among the interesting similarities to consider are the Cash for Clunkers program in the United States and the Scrappage program in Ireland. Both of these Consumer Incentive Programs have increased auto sales but the question should be asked - is this really market stimulus or has it only brought future buying forward?

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