Last week, Wheels.ca blogger John Leblanc argued that consumer incentives are helping to keep German car makers in the black. Today, John posted a blog on how Ford Canada is asking the Canadian goverment to take a cue from Germany and to give consumers $3500 when they trade in their old cars for new ones.
This approach has merits: it helps ensure that auto dealers, not just auto makers, stay in business. It also allows consumers to upgrade to cars that burn less fuel and generate less pollution. (Mind you, building a new car consumes energy and generates some degree of pollution, so I'm not totally convinced as to the environmental benefit.)
I like Ford's approach, but admittedly, government incentives can only go so far. Do such incentives only prolong the eventual decline of the companies they are trying to support? Or are they the best way to ensure that the companies stay afloat until the economy recovers?