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German police launch probe into scrappage fraud

Germany’s federal criminal office (BKA) is conducting a fraud investigation connected to the car-scrapping scheme, suspecting thousands of vehicles have been smuggled abroad rather than junked, a crime office official said.

BKA Vice President Wilfried Albishausen said about 50,000 officially scrapped vehicles may have been illegally transported to eastern Europe and Africa.

“The markets are virtually insatiable. Eastern Europe and Africa have a backlog of demand for used vehicles,” Albishausen told Reuters.

“The profit margin is enormous,” Albishausen said. “If we assume that it is in fact about 5 percent to 10 percent of vehicles, that is about 50,000, then this is a profit of about 125 million euros — 2,500 euros per car.”

The program has proved hugely popular with new car registrations in Germany up 29.5 percent in July to nearly 340,000 units.

German Finance Minister Peer Steinbrueck said some abuse of the scheme was inevitable.

“You can never entirely rule out a certain amount of abuse,” he told a news conference.

We like the use of the word “inevitable” so could something similar happen here?

Source: Automotive News

Aug 6, 2009MTI
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