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Frankfurt - A government bonus for scrapping old cars to boost the auto market is a dangerous tool that can have the opposite effect, Peugeot-Citroen boss Christian Streiff said in an interview published on Friday.
"The scrapping bonus is a dangerous tool. When it ends, times will not be easy" for automakers, Streiff told the Sueddeutsche Zeitung newspaper on the sidelines of the Geneva Motor Show.
Streiff said he feared an "inverse effect" on auto sales when the bonuses that have taken effect in several European countries expire.
In France such a plan began in December, and provides the buyer of a new passenger car or light utility vehicle with €1 000 if they turn in a car that is more than 10 years old.
"Scrapping premiums are useful for stabilising markets," Streiff nonetheless acknowledged.
"It is working well in France, in Germany and in Italy, where sales have not collapsed as much as in Spain," he added.
In Germany, where new car buyers get a boost of €2 500, Peugeot sales have doubled, according to managing director Jean-Philippe Collin.
- AFP