Impacts of a scrappage program: The case of the Czech Republic

In this thesis we are analyzing impacts of scrapping programs on production of per- sonal cars in the Czech Republic. The scrappage scheme was introduced in thirteen states of the European Union as a possible solution to decline of demand for new per- sonal cars in 2008 and 2009 as a consequence of economic crisis. The scrappage scheme has not been introduced in the Czech Republic, even though the law permitting this scheme has been passed. The first chapter introduces a scrapping scheme in gene- ral, compares advantages and disadvantages and connects a scrapping scheme with the automotive industry of the Czech Republic. Furthermore, the position of Czech producers on domestic and European market is studied in this chapter. The second chapter concerns scrapping schemes in particular states of the European Union. We analyze the change of deliveries of producers to customers in particular states using data provided by these producers. In the third chapter an econometric analysis is used to identify main determinants of the demand for new personal cars and these determinants are compared with results from previous studies. The expected change of demand for new personal cars as a consequence of scrapping scheme is based on these determinants estimated and the impacts of this expected change on..