Rădăcini: Scrappage premium 'carrot' should be complemented by old car tax 'stick'

Nicolae Sorescu, head of the auto arm of Rădăcini group, which includes dealers of Opel, Chevrolet, Suzuki, Saab and Mazda brands, says that besides the old car scrappage scheme the government needs to implement a new system to tax imports of used cars, as well as cars already existing on the market, depending on pollution levels, after the West-European model.

"Those in the West came up with the carrot and stick. The carrot was the scrappage premium and the stick was the tax on carbon dioxide emissions. Taxes for old cars are so high that you end up paying as much as the cost of the car in one year or two so that everyone turned to the scrappage scheme," Sorescu says.
The statement comes as sales of new cars dropped further, by 25% in the first half.
As regards Romania's used car market, it has now come to account for over two thirds of total new car registrations.
As both in 2009 and 2010 car dealers resorted to discounts to cut inventories and get cash, cash is not always the solution, Sorescu believes. He says that the exchange rate fluctuations can trigger larger losses than in the case money stays immobilised in a car fleet.
Rădăcini group will launch Domino's Pizza franchise this month, the second largest pizza chain in the US, after the license was acquired by businessman Ali Madadi, who controls Rădăcini, according to market sources.