Toronto: Canadian government incentives to encourage a shift from gas-guzzling SUVs to fuel-efficient “green cars” could hurt struggling North American automakers by keeping some drivers out of the marketplace without significantly boosting sales of gasoline-electric hybrid cars, industry watchers said.
Auto analyst Dennis DesRosiers said on 20 March the government should be concerned with how automakers might react to its budget plan announced Monday, which favours hybrid cars with a rebate of up to $2,000 Canadian (US $1,722, euro1,295.13) on the purchase but puts a $4,000 Canadian (US $3,444, euro2,590.25) tax on SUVs and other vehicles that use large amounts of fuel.
“If I was General Motors, Ford and Chrysler, I’d be real (upset). Right now, these companies are in real sensitive mode in terms of their very survival,” DesRosiers said.
“Key decisions are being made in their head office boardrooms in terms of plans of what to keep open, what plants to close and where to put their investments. And what does the federal government do? They send a bomb, a missile into these boardrooms saying we’re going to put a $4,000 tax on your most profitable vehicles,” he said.
DesRosiers suggested consumers will find other ways to acquire an SUV, if they really want to make the purchase, such as buying used an area that is not covered by the incentive plan or traveling to the US to buy.
Canadian Autoworkers Union president Buzz Hargrove called the incentives “ill thought-out” and said they would immediately detract from sales of Canadian-made vehicles.