Toyota Canada Proposes Plan To Fuel Car Sales

Automaker is urging the Canadian federal government to provide billions of dollars in credit and incentives to stimulate new car sales.

OTTAWA (CP) -- Toyota Canada is urging the federal government to provide billions of dollars in credit and incentives to stimulate new car sales.

Managing director Stephen Beatty told a Commons committee hearing the industry's biggest challenge is lack of credit, with low consumer confidence running a close second.

He said slumping sales are jeopardizing more jobs at dealerships and suppliers, than at threatened assembly plants.

Beatty encouraged the government to focus on programs that encourage Canadians to buy new vehicles.

He urged the federal government to speed up implementation of a $12-billion program aimed at boosting the ability of banks and auto finance companies to finance new car sales and leases.

Beatty joined Ford Motor Co. of Canada Ltd. chief executive David Mondragon and the auto dealers' association in turning up the heat on Ottawa to provide broader assistance for the industry.

Beatty said the government should consider programs to encourage consumers to buy new vehicles, including tax-free periods or a scrappage program that would provide an incentive to trade in older cars or light trucks for new ones.

"In an integrated North American market, Canada must do its part to address the economic forces that have caused new car purchases to stall," Beatty said.

"If the government wants to help the manufacturing activities of the auto sector, the best way to do that is ensure there's a healthy market for their products. The fastest and most effective way to do so is to create immediate access to credit."

Industry Minister Tony Clement said Tuesday the government is working to improve credit conditions but added incentives to boost sales in Canada, such as a tax holiday or a scrappage program won't solve the industry's problems.

He noted 85 per cent of production from Canadian auto plants is sold in the United States.

"The issue is not Canadian demand, the issue is American demand," he said.

Ottawa already has a program offering car owners $300 to scrap their old cars but Finance Minister Jim Flaherty said he's concerned such an incentive doesn't guarantee car owners will replace older vehicles with new ones.

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