How successful was the auto subsidy?

The government’s eco-car subsidy appears to have run its course. Although it provided a visible boost to car sales, which supported aggregate spending, the subsidy should not be given all the credit for the recent recovery in the sector. What’s more, other factors appear to account for most of the increase in auto production, and the timing of the policy was poor. Finally, because consumers brought forward spending, this increases the likelihood the economy will contract in the second half of the year.