Toyota Canada: Incentives, not bailout

OTTAWA, March 11 (UPI) -- The Canadian government has been urged by a second automaker, Toyota Canada, to skip bailout measures and instead create buying incentives.

Speaking to a House of Commons committee Tuesday night, Toyota's Managing Director Stephen Beatty said it would be preferable to implement tax incentives or "holidays" to spur sales, the Globe and Mail reported.

"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," Beatty said. "The fastest and most effective way to do so is to create immediate access to credit."

A night earlier, Ford Canada's chief, David Mondragon, urged the same committee give a $3,500 voucher for scrapping cars older than 11 years and buying a new car to create stimulus in the wallowing industry.

However, Conservative Industry Minister Tony Clement told reporters work is afoot to improve credit conditions but that was only a minor factor, as 85 percent of Canadian vehicles are sold in the United States.

"The issue is not Canadian demand, the issue is American demand," Clement said. "When Americans stopped buying automobiles, or cut their purchases by almost 50 percent, that had a knock-down effect not only in Canada, but in Mexico and Europe and throughout the world."