Study suggests Asian carmakers are winners from German subsidies

Study suggests Asian carmakers are winners from German subsidies Bonn, Germany - Berlin's scrappage scheme for old cars, intended to save jobs in the struggling German car industry, may have partly backfired, helping Asian manufacturers expand their previously minute sales, a business study suggested Thursday.

Germany is borrowing on capital markets to fund 5 billion euros (7 billion dollars) in grants to anyone who scraps a car more than 9 years old and buys another less than one year old.

But only one German maker, Volkswagen, gained market share as a result, the study by the Simon-Kucher price and strategy consultancy in Bonn said. It said Ford and Opel, which have big German factories, lost market share after the scheme was introduced.

By contrast, South Korea-based Kia tripled its share of the small-car market, and South Korea's Hyundai doubled its share.

Among Japanese makers, Mazda expanded its share by 60 per cent, Subaru by 50 per cent and Honda by 29 per cent.

However the study also pointed out that Asian brands started from a low base: Kia, Mazda and Honda claimed less than 2 per cent of new-car registrations in the first five months of the year, licensing authority data showed, and even Hyundai had less than 3 per cent.

Volkswagen, which supplies 20 per cent of cars on German roads, managed to grow its sales by one quarter, but premium makers such as BMW and Mercedes-Benz gained almost no benefit from the scrappage scheme, which has been popular with German motorists.

Even French brands, widely expected to gain ground, lost market share, Simon-Kucher said. The government is paying 2,500 euros to every owner who sends an old car to the crusher and buys a new one.(dpa)