Ford's U.S. Sales Chief Wants a New "Cash for Clunkers" Initiative: Here's Why It Won't Help
The underlying premise sounds reasonable enough: Encourage consumers to buy new cars with generous subsidies to sell their older ones, and as a result, you'll give the U.S. economy a much-needed shot in the arm. From that perspective, the recently floated idea has plenty of support, from Ford Motor (NYSE: F) U.S. sales chief Mark LaNeve in particular.
The proverbial fly in the ointment: The theory doesn't quite hold water. A closer look at the so-called Cash for Clunkers program implemented back in 2009 suggests the initiative didn't actually drive the purchase of more cars or even give the economy a jolt. It simply compacted sales that would have materialized anyway into a very narrow time frame.
And this time around, there are even fewer actual clunkers on the road than there were then.
Source Fool.com
