The controversial ‘Cash For Clunkers’ scheme has been signed off by President Obama in the USA.

Under this scheme the US Government will help buyers pay for a more fuel efficient car or truck if they trade in a less fuel efficient vehicle.

Whilst it has been widely welcomed by the motor trade it does have its detractors.

A generous trade-in allowance will be applied to the used vehicle, but conditions apply, and that’s where the controversy sets in.

In simplified terms, here’s what happens

1. The trade in vehicle must be between 8 and 25 years old.

2. The trade in vehicle must have a fuel economy of 18 mpg or less

3. The trade in vehicle must be scrapped.

4. The new vehicle cannot have a recommended price exceeding $45,000 US.

5. The new vehicle must have an economy value of at least 22mpg (cars), or 18mpg (smaller trucks).

If the new vehicle rates at 10mpg better than the trade in then the Government will give the customer $4500 for the scrapped vehicle.

This is a temporary measure, but it has been much applauded by the motor trade as an effective and greenie friendly stimulus package.

However it does have its detractors.

The detractors say:-

1. It’s wrong to include imported new vehicles in the scheme, it should solely promote local manufacturers.

2. It encourages exactly the wrong people to participate, those with old, virtually worthless vehicles and they can’t afford a brand new vehicle. 

3. The special allowance is more than compromised by the greenhouse emissions impact of making a new vehicle.

4. The cost is far too much to benefit far too few.

But, of course, the US car producers are in such dire straights that any initiative will be warmly welcomed, and this is one of them.

Will it spread to Australia?

Well, Germany already has a similar stimulus, and it’s pretty certain that these schemes will be closely monitored by the Australian Government, but, as such a high proportion of our cars are imported, a similar scheme would be unlikely to produce such a profound benefit.

Bankrupt?

 Closing Down?

Lost export orders?

Being sold off?

We’ve heard all the rumours and speculation from scaremongers following the parent company’s problems in the USA.

But how does it impact on Holden in Australia?

General Motors in the US has filed for bankruptcy protection, and the Obama administration (along with its Canadian counterpart) plan to take a controlling stake in the company prior to it emerging from bankruptcy protection in about three months.

A leaner, streamlined GM will re-appear after serious surgery.

Part of this cost-cutting programme is the proposed sell off of its European brands, Vauxhall in the UK and Opel in Germany.

They have also cancelled a big export order from Holden for Pontiac cars bound for the US.

But Holden are still very much upbeat!

Their managing director, Mark Reuss, has told the press that Holden is not for sale!

It has NOT been put on the market and they are not entertaining any offers for the company- at least in the near future.

In fact, Holden are currently gearing up to produce their most important small car in their history, the Holden Cruze.

Launched this month, the Cruze will initially be imported from GM’s manufacturing plant in Korea, but it is slated for local production in 2010 alongside the Commodore.

The pricing for the Cruze is extremely competitive and reflects Holden’s determination to make a mark for the car in Australia, and stay here for the long term.

We can happily report the first bit of good sales news in many, many months.

The Government’s 30percent and 50 percent tax incentives seem to have worked, if recent sales patterns are a guide.

The new car market is showing clear signs of recovery. Whilst sales were down 15 percent year on year for May this compared favourably with the 20percent drop in the first four months of the year.

The Government is giving big business a 30 percent tax rebate on car purchases, providing orders are placed by 30th June 2009, whilst small business ($2mil p.a. or less) will enjoy  a 50 percent tax bonus extending to December 2009 on their vehicle purchases.

So who were the big winners in May?

Four wheel drives did well, but the most impressive figures came from Korean car maker, Hyundai, who recorded a huge 32 percent sales lift, led by the highly popular i30 small car.

This has clearly surprised many manufacturers and importers as dealers are reporting stock shortages throughout Australia.

Particularly affected are Honda dealers who have suffered a 60 percent reduction in their allocation this month.

June sales, therefore, may well depend on stock availability rather that pure demand

The NSW Government has now legislated to rip off the motorist.

Private Fleet has already shown that E10 unleaded fuel costs more, not less, to run.

Even though E10 costs 3c a litre less at the pump it uses more fuel so that in the final outcome it costs more.

So how would you feel if you were told that your Government is going to ban the sale of unleaded fuel and make you pay more to run your car without ANY positive environmental benefit?

You’d be angry, wouldn’t you? But that’s exactly what’s happening to the hapless NSW motorist.

The Biofuel (Ethanol Content) Amendment Bill 2009 tabled by The Hon. Tony Kelly a few weeks ago states that it will phase out regular unleaded from July 2011.

Thankfully it’s the only State Government - so far, to discriminate against the motorist and deny them the opportunity to purchase the most economical fuel option - standard unleaded.

The NSW motorist (and motorists visiting from other States) can express his displeasure with the steering wheel and drive past the sites that don’t offer regular unleaded ( and they will become more commonplace), and insist in buying the most economical fuel.

Perhaps the refineries will see the trend and maybe even the NSW Government will realise this is a vote losing issue , and they are certainly looking for every vote they can get before the next election in 2011.

Have you ever thought about what it would be like to be a robot?

Well, if the NSW Roads Minister has his way you may get the chance.

A device that enforeably restricts the speed of your car to the local speed limits is to be tested in Wollongong NSW.

Forty of the Intelligent Speed Adaption (ISA) units will be trialled in Wollongong, and, if the trial is successful it could be a standard feature in all new cars soon.

The system works by sending and receiving satellite signals, which calculates the speed limit against the car’s actual speed. If the car is exceeding the speed limit then there will be an audible warning and, if ignored by the driver,  the device will slow the car down to comply with the appropriate speed limit.

There will be an override facility that can turn off the device, but we still have concerns.

Whilst we are absolutely in favour of obeying the law, obeying the speed limits and reducing accidents and injuries on the road there are some real issues to think about here.

Firstly, if the device can be easily overridden, then the very people who want to speed will still do so, as the device can be made inoperative.

Then we have the situation where just occasionally you need to speed to get out of trouble, so if you  depress the accelerator to avoid an accident then will it respond and de-activate itself quickly enough?

What about road works? If you become dependent on the device to ‘keep you legal’ will it recognise temporary speed limits at roadworks (which are enforceable) or innocently speed you past them at the risk of being fined from a faulty or out of date device?

We’ve all probably had experience or heard tales about sat/navs that drop out, pick up the wrong info, send you down cart tracks or give you the wrong speed limit feedback, so suspician about the efficacy of this experiment is natural.

However if it can be proved to work, slow down the speedsters and reduce accidents then it will have our support.

We’ll keep you posted on any developments.

The Cruze is Holden’s critical new small car that goes on sale in June and pricing has just been announced, with a very competitive entry price of $20,990 ( plus on road costs) for the Cruze CD 1.8L manual. Auto costs $2000 more.The diesel version costs $3,000 more.

The better equipped CDX petrol costs $23,990 for the manual and $2,000 extra for the automatic. (There is no diesel option for the CDX).

For a full review of this exciting and crucial new car from Holden visit http://www.privatefleet.com.au/buying-new-car/car-reviews/holden/holden-cruz-review/

 The Cruze will replace the well respected Holden Astra - almost.

For the time being there will be no hatch back, and there won’t be until local production kicks in next year.

So your only option for a small Holden Hatch is to latch on to of the the European built Astra run-out deals, and, of course, Private Fleet can help you with that.

Q. When is a bargain not a bargain?

A. When you buy fuel in NSW.

The NSW Government insists that filling stations sell at least 2 percent of ethanol in fuel in NSW.

So most fuel outlets sell ‘E10′, that’s fuel with a ten percent ethanol component.

But it is usually 3 cents cheaper than 91 octane regular unleaded fuel, so looks like a bargain and well worth using.
Wrong!

Last year the Sydney Morning Herald undertook a comparison test of the economies of using E10 versus normal 91 octane unleaded.

They drove three identical Toyota Camrys more than 2000kms in a convoy and under a range of conditions to compare the actual costs of each type of fuel.

In their test the E10 fuel returned 9.81 litres/100kms.

The regular unleaded returned 9.4L/100kms.

So over the whole journey the Ethanol fuel cost a total of $276.55 whilst the regular fuel cost $271.56.

Their conclusion was that a bargain wasn’t a bargain at all.

We were intrigued by this so we thought we’d put it to the test with a couple of our staff cars.

Car number one was an eight cylinder Holden that had recorded an average of 12.9 L/100kms over the previous 9,000 kms. on regular fuel, much of the driving on freeways.

So we put E10 in it exclusively from January to mid March and did much the same driving and reset the computer.

Guess what? Our consumption went up to 13.7L/100 kms.

But to be fair we then reverted back to regular unleaded and tested again from mid March to mid May where we did another 3000 kms. and, yes, we went right back to 12.9L/100kms.

So in this case our 3c per litre saving evaporated into an extra cost over 3000 kms of $35.27

We encountered similar results with our Suburu.

Our base reading for the Imprezza 8.0L/100 with plenty of city driving.

We changed to ethanol exclusively in January but did pretty much the same type of driving, only to find our consumption had risen to 8.9L/100kms by the middle of March after re-setting the computer.

We set it back to zero again and reverted to regular unleaded.

You are probably well ahead of us when we say we went back to 8.0L/100 kms over the next 1700kms.

It also meant that over 1700kms. we spent $15 more on the ‘bargain’ fuel than on the 3c more expensive brew.

So on a purely simple conclusion on a cost basis both tests came firmly down in favour of regular unleaded.

Whilst that’s good enough for us the debate still rages on regarding the possible advantages of ethanol based fuel on greenhouse gas emissions. But that’s also subject to huge controversy between governments, fuel distributors and other interested parties.So for the moment we’ll leave that to them.

In the meantime we’re steering away from the E10 fuel pumps and saving some money.

Amongst the handouts announced in the Swan budget on 12th May was an increased bonus tax deduction of 50 percent for eligible assets purchased before 31st December 2009 for small business.

That’s great news for a small business contemplating buying a new company vehicle.

The example given in the tax documents refers to a vehicle costing $30,000. The current tax deduction under the 30% tax break is $9000. But the additional amount announced in the budget is a further $6000 resulting in a total  deduction to small business of $15,000.

For further details click go to http://www.privatefleet.com.au/investmentallowance/

OK let’s get the bad news out of the way.

Yet again it’s the official car sales figures - this time for February.  New vehicle sales were down a whopping 22% in February.  This equates to just under 20,000 less vehicles sold compared with the month of February 2008.

However this is positively mild news when compared with the US.  The equivalent statistic stateside for the same month was that sales were down an incredible 41% (General Motors down 53% alone!).  It’s actually the lowest monthly sales figures seen in the US for 28 years.

So whilst the local news has to be considered ‘bad news’ - it could have been a lot worse.

So, the Good News?

Well it’s good news for those who are looking to purchase a car for business use.  After some uncertainty, it has now been confirmed that motor vehicles will fall into the right asset category to claim a 30% tax break on the purchase this financial year.  There are a ton of details as you’d expect but in layman’s terms if you are running a business and have had any plans to purchase a car in the next 18 months or so, you should consider ordering now, or at least before June 30.

The small car segment continues to make inroads into traditional large car territory as the Japanese built Mazda 3 knocks the Holden Commodore off the top spot for sales in the moth of January.

This not only reflects a general shift towards smaller and more fuel efficient cars but also demonstrates how when fleet buyers are taken out of the market (many businesses close for a time over the Xmas period), overall sales figures can move around quite significantly.

Whilst this was good news for Mazda (in fact this is the first time that a wholly imported brand (Mazda) has taken the top spot from manufacturers that still build in Australia) the overall market suffered a 18% drop in sales compared to January 2008.

So it’s tough times ahead for the Australia auto industry - especially the local manufacturers.  January was also significant as it was the first time Mazda sold more units than Ford.

Let’s hope buyers can see through the doom & gloom, recognise some of the fantastic value available in Australia & give themselves a treat - especially if it’s made locally!