luxury cars under 80 000 image
froalskine
In 1986, the Yugo was the lowest priced car in the US at under $4000. What is the lowest priced new car that can be found on a car lot today? Zero options, stripped down etc...?
This isn't something I'm going to buy...I was just curious if anybody knew...
Answer
From Business Week:
The Race To Build Really Cheap Cars
The newest thing on four wheels is sturdy, inexpensive, and probably not made in the U.S.
How cheap is cheap? Renault-Nissan Chief Executive Carlos Ghosn is betting that for autos, the magic number is under $3,000. At a plant-opening ceremony in India Apr. 4, he was already talking up the industry's next challenge: a future model that would sport a sticker price as low as $2,500âabout 40% less than the least expensive subcompact currently on the market. Renault-Nissan is the first global automaker to take up the gauntlet thrown down in 2003 by India's Tata Motors, which plans to launch a $2,500 car next year. Both are leading a race to the bottom that could affect the business every bit as much as Henry Ford's Model T did a century ago.
After years of making their mass-market cars more expensive, the world's automakers have abruptly shifted into reverse. With stagnant growth in the U.S., Europe, and Japan, they are now eyeing emerging markets for new opportunities. That means redesigning the car for buyers who might otherwise be able to afford only a motorcycle. And outdated, stripped-down models won't do. Demand is surging for basic cars that combine modern comfort with safety at a fraction of today's cost. The rush to build a modern, no-frills car could do for autos what airlines like Southwest Airlines Co. (LUV ) and JetBlue Airways Corp. (JBLU ) have done for travel, and H&M and Zara have done for fashion. Low-cost cars are "the single most important trend in the automotive industry today," says Vikas Tibrewala, the Paris-based executive director of the Monitor Group consultancy.
Whatever the lowest sticker price turns out to be, the discounting trend will hit cars across the board, from minis to SUVs. Renault already has a runaway hit with its bare-bones Logan sedan. The automaker began offering the roomy Logan in Europe for just $7,200 in 2004âsome 40% less than rival sedansâand has since sold 450,000 of the cars in 51 countries. Workers at its sprawling Dacia plant near the Romanian city of Pitesti and a newer plant in Russia toil in round-the-clock shifts but still can't meet demand. "With the Logan we have the product and we have the lead," says Ghosn.
A $3,000 car for Asian markets, built in low-cost India with a local partner, is the next logical step. "The main weakness of today's global automakers is that they are incapable of delivering a car that fulfills basic needs at a very low price," says Ghosn. "The people who have these skills are in India and China."
CUTTING COSTS TO THE BONE
That realization is now dawning on the industry's giants. When Tata made its vow to build a $2,500 car, many Western auto executives ridiculed the project, dubbing it a four-wheel bicycle. They aren't laughing anymore. Tata's model is a real car with four doors, a 33-horsepower engine, and a top speed of around 80 mph. The automaker claims it will even pass a crash test. And while the car probably won't win any beauty contests, it's no ugly duckling either, according to the handful of industry insiders who have been given a glimpse. The rest is top secret, but Tata engineers are already testing a prototype as the clock ticks toward a late 2008 launch. The key is India's low-cost engineers and their prodigious ability to trim needless spending to the bone, a skill developed by years of selling to the bottom of the pyramid. "You have to cut costs on everythingâseats, materials, componentsâthe whole package," says Tata Group Chairman Ratan N. Tata.
There's no lack of potential customers: Hundreds of millions of Chinese, Indians, Brazilians, Russians, and others will likely join the middle class in the coming decade, and cars are sure to be at the top of their shopping lists. As a result, the global car market is polarizing: The luxury segment continues to grow, cheap cars boom, and everything else gets squeezed. By 2012, the market for vehicles priced under $10,000 is likely to reach 18 million cars, or a fifth of world auto sales, according to Roland Berger Strategy Consultants. That's up from 12 million today.
So far this year, every major carmaker has announced its own 21st century Model T project. Toyota (TM ), Volkswagen (VLKAY ), Fiat (FIA ), and Peugeot have all vowed to build cut-rate Logan-killers. General Motors Corp. (GM ) intends to use its Korean subsidiary, GM Daewoo, to design a model that will sell for about $7,000. Chrysler (DCX ) is developing low-cost cars with Chinese manufacturer Chery. Korea's Hyundai Motor Co. is making India its global hub for small-car production and expects to double its output to 600,000 cars annually by yearend, many of them destined for Europe. "Automakers will have to live with a trend of lower-cost vehicles. It is difficult but that's where the demand is," says David Nicholas (Nick) Reilly, president of GM Asia Pacific. The average retail price for many compacts will probably sink to $9,000, while minis will go for around $7,000, Reilly predicts. That's about 15% below current model prices.
Car manufacturers, of course, have always sought to cut costs and pack more value into each new-model generation to stay competitive. But now, emerging markets like India offer cheap engineering, inexpensive parts-sourcing, and low-cost manufacturing. For its new car, for example, Tata should be able to slash the cost of the engine to about $700, or 50% lower than a Western-developed equivalent, says one consultant close to the company. Combine Indian brainpower with Western innovation in design, materials, and processes, and the potential exists for a quantum leap in cost-reduction without major sacrifices in quality. Tata and Renault's Indian partner Mahindra & Mahindra Ltd. are already doing engineering work for global automakers at cut-rate prices. Tata, for example, is working on a coupe for a major Western customer.
LESSONS FOR BIG CARS
Another new factor in the low-cost car segment is the possibility of huge volumes that can drive profits. Ultra-cheap cars historically have not sold in large numbers. In 2005, low-cost cars represented less than 1% of new-vehicle sales in the U.S., according to Roland Berger. By contrast, emerging markets, which held little appeal for the major car brands even 10 years ago, now offer a volume bonanza that can make even cheap cars profit spinners. In India alone, some 1.6 million motorcycle and scooter riders are likely to buy a car over the next five years, the Berger study estimates. India's auto market is set to double to 3.3 million cars by 2014, while China's will grow 140% over the same period, to 16.5 million cars, according to J.D. Power (MHP ) Automotive Forecasting. That kind of demand makes dirt-cheap cars viable. "The real trick and idea behind the low-cost segment is to increase volume as much as possible to bring costs down," says Alfredo Altavilla, CEO for Fiat Powertrain Technologies. (Fiat signed a technical partnership with Tata Motors in February.)
What automakers learn from experimenting with discount cars may well shape how more expensive models are made. To make a success of the Logan, Renault manufactured in low-cost Romania. It developed a design that reduced the total number of parts and made assembly a cinch. It stripped out sophisticated electronics, dispensed with high-tech curved windshields, and even saved $3 per vehicle by using identical rear-view mirrors on each side. The biggest breakthrough: Renault was able to eliminate expensive prototypes and the pricey tooling involved in building them. As a result, it could move directly from digital mockup to production, an innovation that saved the French car company $40 million. Now Renault has figured out how to eliminate physical prototypes for all of its models.
Toyota is working on a bottom-of-the-line car with an expected sticker price of under $7,000 that could hit emerging markets such as India and Brazil by 2009. Toyota's management is banking on breakthroughs in new materials, manufacturing, and low-cost factories. If the Japanese company's engineers do their job, the cost-saving strategies will be deployed in everything from Corollas to Lexus SUVs. "When I asked for the low-cost development project two years ago, I wanted to see technology that would be applied to other vehicles as well," says Toyota President Katsuaki Watanabe. A prototype is expected this spring. A successful Toyota venture in this segment could "scramble all the eggs in emerging markets," says Fiat's Altavilla.
WHAT'S AT STAKE
To automakers' astonishment, cheap cars are also proving to be just as popular in established markets as they are in the developing world. Renault originally expected to sell the Logan only in Eastern Europe and other emerging markets. But in 2005, the automaker started offering it across Western Europe. Buyers have flooded showrooms to get behind the wheel of the no-frills model. Yesterday's cheap cars (remember the laughably bad Yugo?) failed to take off in the West because of poor quality. The new generation of cheap cars will be sturdy and reliable and will appeal to Western consumers who want to spend money on things other than transport. "It's all about price for performance," says Frankfurt music teacher Elmar Kolle, who in November replaced his Ford (F ) Mondeo with a marine-blue Logan sedan. "I'd have to pay 5,000 euros [$6,500] more for a comparable car" from another manufacturer.
The shift to cut-rate wheels is jarring for an industry that has fixated for at least a decade on premium cars and their fat margins. BMW earns an estimated $3,300 per car on average, vs. Logan's $400 per car, according to Ferdinand Dudenhöffer, director of the German Center for Automotive Research. And when you get down to a sub-$3,000 sticker price, some experts say it'll be tough to cover the cost of the parts involved. "Any way you look at it, it will be difficult to be profitable," says David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
So why bother? Western automakers who don't join the fray risk being shut out of the growth in emerging markets. Even worse, they could give ambitious challengers a dangerous foothold in the Westânot unlike the one they gave the Japanese by ignoring their low-cost, fuel-efficient models in the 1970s. China's Geely makes a model for $3,900 and it's aiming to export a car to the U.S. by 2010. Suzuki Motor Corp. (SZKMF ), which sells cars starting at $4,400 in India, will launch a new compact in 2008 and export it to Europe. Tata's $8,500 Indica compact sedan already sells in southern and eastern Europe. "The Chinese and Indians are coming," says Patrick Pelata, chief of strategy and product planning at Renault. "If we don't do our job, we will give them a huge slice of market share. We have to keep moving."
The majority of low-cost cars will range from $5,000 to $10,000, depending on size and features. Analysts say adding equipment required for safety and emissions control in Western markets would automatically bring the price of a cheap Chinese or Indian car up to $6,000 to $7,000. Many cars in India, for example, are sold without airbags or antilock brakes, standard features in the West. "There is a huge cost element to safety," says Hormazd Sorabjee, editor of Autocar India, noting that crash-test facilities alone are a gigantic investment.
Still, India remains the chief test bed and battleground for really cheap cars. Hyundai uses its plant outside Chennai as a global hub for its small-car production. By tapping local suppliers and manufacturing, the Korean upstart is able to offer a popular entry-level subcompact, the Santro, at a starting price of $6,300 in India, while still making features such as air conditioning and power steering standard. Moving along the pristine, high-tech production lines of its Chennai plant are also cars for export to Europe, Russia, and Latin America. Outside the plant, a vast sea of new cars, some 65% of them earmarked for export markets, fills Hyundai's orderly lots. "My only problem," says Lheem Heung-Soo, managing director of Hyundai India, "is limited capacity." He's ramping up production fast: So are all his rivals.
By Gail Edmondson, with Ian Rowley in Tokyo, Nandini Lakshman in Mumbai, David Welch in Detroit, and Dexter Roberts in Beijing
From Business Week:
The Race To Build Really Cheap Cars
The newest thing on four wheels is sturdy, inexpensive, and probably not made in the U.S.
How cheap is cheap? Renault-Nissan Chief Executive Carlos Ghosn is betting that for autos, the magic number is under $3,000. At a plant-opening ceremony in India Apr. 4, he was already talking up the industry's next challenge: a future model that would sport a sticker price as low as $2,500âabout 40% less than the least expensive subcompact currently on the market. Renault-Nissan is the first global automaker to take up the gauntlet thrown down in 2003 by India's Tata Motors, which plans to launch a $2,500 car next year. Both are leading a race to the bottom that could affect the business every bit as much as Henry Ford's Model T did a century ago.
After years of making their mass-market cars more expensive, the world's automakers have abruptly shifted into reverse. With stagnant growth in the U.S., Europe, and Japan, they are now eyeing emerging markets for new opportunities. That means redesigning the car for buyers who might otherwise be able to afford only a motorcycle. And outdated, stripped-down models won't do. Demand is surging for basic cars that combine modern comfort with safety at a fraction of today's cost. The rush to build a modern, no-frills car could do for autos what airlines like Southwest Airlines Co. (LUV ) and JetBlue Airways Corp. (JBLU ) have done for travel, and H&M and Zara have done for fashion. Low-cost cars are "the single most important trend in the automotive industry today," says Vikas Tibrewala, the Paris-based executive director of the Monitor Group consultancy.
Whatever the lowest sticker price turns out to be, the discounting trend will hit cars across the board, from minis to SUVs. Renault already has a runaway hit with its bare-bones Logan sedan. The automaker began offering the roomy Logan in Europe for just $7,200 in 2004âsome 40% less than rival sedansâand has since sold 450,000 of the cars in 51 countries. Workers at its sprawling Dacia plant near the Romanian city of Pitesti and a newer plant in Russia toil in round-the-clock shifts but still can't meet demand. "With the Logan we have the product and we have the lead," says Ghosn.
A $3,000 car for Asian markets, built in low-cost India with a local partner, is the next logical step. "The main weakness of today's global automakers is that they are incapable of delivering a car that fulfills basic needs at a very low price," says Ghosn. "The people who have these skills are in India and China."
CUTTING COSTS TO THE BONE
That realization is now dawning on the industry's giants. When Tata made its vow to build a $2,500 car, many Western auto executives ridiculed the project, dubbing it a four-wheel bicycle. They aren't laughing anymore. Tata's model is a real car with four doors, a 33-horsepower engine, and a top speed of around 80 mph. The automaker claims it will even pass a crash test. And while the car probably won't win any beauty contests, it's no ugly duckling either, according to the handful of industry insiders who have been given a glimpse. The rest is top secret, but Tata engineers are already testing a prototype as the clock ticks toward a late 2008 launch. The key is India's low-cost engineers and their prodigious ability to trim needless spending to the bone, a skill developed by years of selling to the bottom of the pyramid. "You have to cut costs on everythingâseats, materials, componentsâthe whole package," says Tata Group Chairman Ratan N. Tata.
There's no lack of potential customers: Hundreds of millions of Chinese, Indians, Brazilians, Russians, and others will likely join the middle class in the coming decade, and cars are sure to be at the top of their shopping lists. As a result, the global car market is polarizing: The luxury segment continues to grow, cheap cars boom, and everything else gets squeezed. By 2012, the market for vehicles priced under $10,000 is likely to reach 18 million cars, or a fifth of world auto sales, according to Roland Berger Strategy Consultants. That's up from 12 million today.
So far this year, every major carmaker has announced its own 21st century Model T project. Toyota (TM ), Volkswagen (VLKAY ), Fiat (FIA ), and Peugeot have all vowed to build cut-rate Logan-killers. General Motors Corp. (GM ) intends to use its Korean subsidiary, GM Daewoo, to design a model that will sell for about $7,000. Chrysler (DCX ) is developing low-cost cars with Chinese manufacturer Chery. Korea's Hyundai Motor Co. is making India its global hub for small-car production and expects to double its output to 600,000 cars annually by yearend, many of them destined for Europe. "Automakers will have to live with a trend of lower-cost vehicles. It is difficult but that's where the demand is," says David Nicholas (Nick) Reilly, president of GM Asia Pacific. The average retail price for many compacts will probably sink to $9,000, while minis will go for around $7,000, Reilly predicts. That's about 15% below current model prices.
Car manufacturers, of course, have always sought to cut costs and pack more value into each new-model generation to stay competitive. But now, emerging markets like India offer cheap engineering, inexpensive parts-sourcing, and low-cost manufacturing. For its new car, for example, Tata should be able to slash the cost of the engine to about $700, or 50% lower than a Western-developed equivalent, says one consultant close to the company. Combine Indian brainpower with Western innovation in design, materials, and processes, and the potential exists for a quantum leap in cost-reduction without major sacrifices in quality. Tata and Renault's Indian partner Mahindra & Mahindra Ltd. are already doing engineering work for global automakers at cut-rate prices. Tata, for example, is working on a coupe for a major Western customer.
LESSONS FOR BIG CARS
Another new factor in the low-cost car segment is the possibility of huge volumes that can drive profits. Ultra-cheap cars historically have not sold in large numbers. In 2005, low-cost cars represented less than 1% of new-vehicle sales in the U.S., according to Roland Berger. By contrast, emerging markets, which held little appeal for the major car brands even 10 years ago, now offer a volume bonanza that can make even cheap cars profit spinners. In India alone, some 1.6 million motorcycle and scooter riders are likely to buy a car over the next five years, the Berger study estimates. India's auto market is set to double to 3.3 million cars by 2014, while China's will grow 140% over the same period, to 16.5 million cars, according to J.D. Power (MHP ) Automotive Forecasting. That kind of demand makes dirt-cheap cars viable. "The real trick and idea behind the low-cost segment is to increase volume as much as possible to bring costs down," says Alfredo Altavilla, CEO for Fiat Powertrain Technologies. (Fiat signed a technical partnership with Tata Motors in February.)
What automakers learn from experimenting with discount cars may well shape how more expensive models are made. To make a success of the Logan, Renault manufactured in low-cost Romania. It developed a design that reduced the total number of parts and made assembly a cinch. It stripped out sophisticated electronics, dispensed with high-tech curved windshields, and even saved $3 per vehicle by using identical rear-view mirrors on each side. The biggest breakthrough: Renault was able to eliminate expensive prototypes and the pricey tooling involved in building them. As a result, it could move directly from digital mockup to production, an innovation that saved the French car company $40 million. Now Renault has figured out how to eliminate physical prototypes for all of its models.
Toyota is working on a bottom-of-the-line car with an expected sticker price of under $7,000 that could hit emerging markets such as India and Brazil by 2009. Toyota's management is banking on breakthroughs in new materials, manufacturing, and low-cost factories. If the Japanese company's engineers do their job, the cost-saving strategies will be deployed in everything from Corollas to Lexus SUVs. "When I asked for the low-cost development project two years ago, I wanted to see technology that would be applied to other vehicles as well," says Toyota President Katsuaki Watanabe. A prototype is expected this spring. A successful Toyota venture in this segment could "scramble all the eggs in emerging markets," says Fiat's Altavilla.
WHAT'S AT STAKE
To automakers' astonishment, cheap cars are also proving to be just as popular in established markets as they are in the developing world. Renault originally expected to sell the Logan only in Eastern Europe and other emerging markets. But in 2005, the automaker started offering it across Western Europe. Buyers have flooded showrooms to get behind the wheel of the no-frills model. Yesterday's cheap cars (remember the laughably bad Yugo?) failed to take off in the West because of poor quality. The new generation of cheap cars will be sturdy and reliable and will appeal to Western consumers who want to spend money on things other than transport. "It's all about price for performance," says Frankfurt music teacher Elmar Kolle, who in November replaced his Ford (F ) Mondeo with a marine-blue Logan sedan. "I'd have to pay 5,000 euros [$6,500] more for a comparable car" from another manufacturer.
The shift to cut-rate wheels is jarring for an industry that has fixated for at least a decade on premium cars and their fat margins. BMW earns an estimated $3,300 per car on average, vs. Logan's $400 per car, according to Ferdinand Dudenhöffer, director of the German Center for Automotive Research. And when you get down to a sub-$3,000 sticker price, some experts say it'll be tough to cover the cost of the parts involved. "Any way you look at it, it will be difficult to be profitable," says David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
So why bother? Western automakers who don't join the fray risk being shut out of the growth in emerging markets. Even worse, they could give ambitious challengers a dangerous foothold in the Westânot unlike the one they gave the Japanese by ignoring their low-cost, fuel-efficient models in the 1970s. China's Geely makes a model for $3,900 and it's aiming to export a car to the U.S. by 2010. Suzuki Motor Corp. (SZKMF ), which sells cars starting at $4,400 in India, will launch a new compact in 2008 and export it to Europe. Tata's $8,500 Indica compact sedan already sells in southern and eastern Europe. "The Chinese and Indians are coming," says Patrick Pelata, chief of strategy and product planning at Renault. "If we don't do our job, we will give them a huge slice of market share. We have to keep moving."
The majority of low-cost cars will range from $5,000 to $10,000, depending on size and features. Analysts say adding equipment required for safety and emissions control in Western markets would automatically bring the price of a cheap Chinese or Indian car up to $6,000 to $7,000. Many cars in India, for example, are sold without airbags or antilock brakes, standard features in the West. "There is a huge cost element to safety," says Hormazd Sorabjee, editor of Autocar India, noting that crash-test facilities alone are a gigantic investment.
Still, India remains the chief test bed and battleground for really cheap cars. Hyundai uses its plant outside Chennai as a global hub for its small-car production. By tapping local suppliers and manufacturing, the Korean upstart is able to offer a popular entry-level subcompact, the Santro, at a starting price of $6,300 in India, while still making features such as air conditioning and power steering standard. Moving along the pristine, high-tech production lines of its Chennai plant are also cars for export to Europe, Russia, and Latin America. Outside the plant, a vast sea of new cars, some 65% of them earmarked for export markets, fills Hyundai's orderly lots. "My only problem," says Lheem Heung-Soo, managing director of Hyundai India, "is limited capacity." He's ramping up production fast: So are all his rivals.
By Gail Edmondson, with Ian Rowley in Tokyo, Nandini Lakshman in Mumbai, David Welch in Detroit, and Dexter Roberts in Beijing
What are the specific cuts involved in the Greek Austerity Budget?
Ragnarok
Is Greece going to abandon universal health care?
Answer
Here is a review of the austerity measures. Nothing is mentioned about health care.
PUBLIC SECTOR
All reductions in salaries, benefits and allowances apply to members of Parliament, government officials and employees.
⢠Cut the 13th and 14th âdoroâ for all public sector employees earning a gross minimum salary of â¬3,000/month. Anyone earning below â¬3000 will receive â¬250 for Easter, â¬250 for summer and â¬500 at Christmas.
⢠Reduce allowances by 8-20 percent in the public sector and 3 percent in the wider public sector (utilities, etc.).
⢠Establish a uniform pay-scale from 2011
⢠Freeze all public sector salaries until 2014
PENSIONS/RETIREMENT
⢠Cut the 13th and 14th âdoroâ for all pensioners collecting a gross minimum payment of â¬2,500/month. Anyone earning below â¬2,500 will receive â¬200 for Easter, â¬200 for summer and â¬400 for Christmas.
⢠Cut bonuses and allowances for all pensioners aged under 60, except for exceptions outlined by law
⢠Calculate pension payments based on average over entire course of working life
⢠Revise and equalize retirement age for men and women, according to life expectancy (which is high in Greece); announced as 65
⢠Civil servants may retire at 60 with reduced pension; or at 65 with full pension
⢠Reinstate LAFKA, which will assess a solidarity levy of 5-10 percent on pensions â¬1400 and over, starting August 1, 2010.
⢠Revise list of âdangerous professions,â reducing or eliminating possibility of early retirement
⢠Raise retirement age for working mothers in the private sector, starting 2011
⢠Revoke pension of any civil servant younger than 55, who is caught working; cut pension of any civil servant, aged 55 or older, by 70 percent if caught working and pension is more than â¬850/month. Starting 2011.
⢠Limit the transfer of pensions from father/mother to children, according to age and income (includes unwed daughters); if eligible to receive two pension transfer, only the highest will be paid
⢠Raise minimum number of years to qualify to 40 years by 2015
⢠Establish guaranteed minimum pension for those over the age of 67
PRIVATE SECTOR
⢠Assess one-time tax to companies showing a minimum profit of â¬100,000 from 2009:
â 100,000 â 300,000: 4 percent
â 300,001 â 1,000,000: 6 percent
â 1,000,001 â 5,000,000: 8 percent
â 5,000,001 + : 10 percent
⢠Raise lawful redundancy rate to 4 percent from 2 percent, making it possible for employers to reduce staff
⢠Revise severance pay
⢠Young people up to age 24 can qualify for a one-year contract at 80 percent the minimum wage & IKA contributions, then be integrated with OAED programs upon termination.
⢠Self-employed with OAEE, aged 30-65, without work for any reason are covered by insurance for two (2) years as long as they: a) Worked a minimum of 600 days, plus 120 days for every year over the age of 30 until reaching 4500 days or 15 years of work; b) are not insured by public sector insurance carrier.
⢠Open âclosed professionsâ
⢠Cancel second installment of solidarity payments
(No cuts to 13th and 14th salaries, as feared)
TAXES
It was previously announced that tax increases would not take effect until July 1, but that was revised to take effect May 3. Right now, itâs under debate.
⢠VAT: All VAT rates were increased 10 percent, so 5 percent is 5.5 percent on books/newspapers; 10 percent is now 11 percent for food; and 21 percent is now 23 percent on goods and services.
⢠âSinâ tax: All tobacco, alcohol and fuel now subject to an additional 10 percent tax. This is the third increase since January 2010.
⢠Tax on luxury cars (new/used): Calculation of 10-40 percent tax is based on factory and market value. See âÎÎο ÏαÏάÏÏι Ïε καινοÏÏια και μεÏαÏειÏιÏμÎνα Î.Χ.â for details and examples.
⢠TV advertising: All TV advertisements are subject to a 20 percent tax from July 1.
Here is a review of the austerity measures. Nothing is mentioned about health care.
PUBLIC SECTOR
All reductions in salaries, benefits and allowances apply to members of Parliament, government officials and employees.
⢠Cut the 13th and 14th âdoroâ for all public sector employees earning a gross minimum salary of â¬3,000/month. Anyone earning below â¬3000 will receive â¬250 for Easter, â¬250 for summer and â¬500 at Christmas.
⢠Reduce allowances by 8-20 percent in the public sector and 3 percent in the wider public sector (utilities, etc.).
⢠Establish a uniform pay-scale from 2011
⢠Freeze all public sector salaries until 2014
PENSIONS/RETIREMENT
⢠Cut the 13th and 14th âdoroâ for all pensioners collecting a gross minimum payment of â¬2,500/month. Anyone earning below â¬2,500 will receive â¬200 for Easter, â¬200 for summer and â¬400 for Christmas.
⢠Cut bonuses and allowances for all pensioners aged under 60, except for exceptions outlined by law
⢠Calculate pension payments based on average over entire course of working life
⢠Revise and equalize retirement age for men and women, according to life expectancy (which is high in Greece); announced as 65
⢠Civil servants may retire at 60 with reduced pension; or at 65 with full pension
⢠Reinstate LAFKA, which will assess a solidarity levy of 5-10 percent on pensions â¬1400 and over, starting August 1, 2010.
⢠Revise list of âdangerous professions,â reducing or eliminating possibility of early retirement
⢠Raise retirement age for working mothers in the private sector, starting 2011
⢠Revoke pension of any civil servant younger than 55, who is caught working; cut pension of any civil servant, aged 55 or older, by 70 percent if caught working and pension is more than â¬850/month. Starting 2011.
⢠Limit the transfer of pensions from father/mother to children, according to age and income (includes unwed daughters); if eligible to receive two pension transfer, only the highest will be paid
⢠Raise minimum number of years to qualify to 40 years by 2015
⢠Establish guaranteed minimum pension for those over the age of 67
PRIVATE SECTOR
⢠Assess one-time tax to companies showing a minimum profit of â¬100,000 from 2009:
â 100,000 â 300,000: 4 percent
â 300,001 â 1,000,000: 6 percent
â 1,000,001 â 5,000,000: 8 percent
â 5,000,001 + : 10 percent
⢠Raise lawful redundancy rate to 4 percent from 2 percent, making it possible for employers to reduce staff
⢠Revise severance pay
⢠Young people up to age 24 can qualify for a one-year contract at 80 percent the minimum wage & IKA contributions, then be integrated with OAED programs upon termination.
⢠Self-employed with OAEE, aged 30-65, without work for any reason are covered by insurance for two (2) years as long as they: a) Worked a minimum of 600 days, plus 120 days for every year over the age of 30 until reaching 4500 days or 15 years of work; b) are not insured by public sector insurance carrier.
⢠Open âclosed professionsâ
⢠Cancel second installment of solidarity payments
(No cuts to 13th and 14th salaries, as feared)
TAXES
It was previously announced that tax increases would not take effect until July 1, but that was revised to take effect May 3. Right now, itâs under debate.
⢠VAT: All VAT rates were increased 10 percent, so 5 percent is 5.5 percent on books/newspapers; 10 percent is now 11 percent for food; and 21 percent is now 23 percent on goods and services.
⢠âSinâ tax: All tobacco, alcohol and fuel now subject to an additional 10 percent tax. This is the third increase since January 2010.
⢠Tax on luxury cars (new/used): Calculation of 10-40 percent tax is based on factory and market value. See âÎÎο ÏαÏάÏÏι Ïε καινοÏÏια και μεÏαÏειÏιÏμÎνα Î.Χ.â for details and examples.
⢠TV advertising: All TV advertisements are subject to a 20 percent tax from July 1.
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