If you thought the domestic car industry was going to the heap, turns out you might be right.
You might remember the car scrappage scheme that existed some years ago in Ireland and other parts of Europe. It offered a money incentive to consumers who were prepared to trade in their old cars in an effort to remove cars ten years and older from our roads. It seems this scheme, or one similar, is set for a return. This week, tucked into the UK budget, introduction of a car scrappage scheme in the UK seems a certainty.
Well done Gordon, that’s only a year behind every other major country in Europe. Maybe he was waiting for Liechtenstein to get onboard as well, we’re not sure, but one thing we do know is that EU giants Germany, France, Italy and Spain are already in the midst of clearly successful government funded scrappage schemes. With calls for action for the UK’s struggling automotive sector have growing louder by the day, it finally looks as though some sort of plan is on the way here too.
As you might imagine, domestic major car manufacturers like Vauxhall are completely sold on the plan as well. Why? There is plenty of evidence that getting bangers off the road is just good business. In Germany, the coalition government is set to extend the €2,500 scrappage premium for consumers who trade in their 10-year-old cars for newer, more fuel-efficient models. The plan has attracted 570,000 new car buyers so far. The French equivalent, worth €1,000 for each car, has also boosted sales, prompting Renault to move its production of the Clio model back to France and create 400 jobs.
The proof is in the pudding. While sales have been falling dramatically in the UK - new car registrations in Germany rose 40% in March and in France increased by almost 10%.
On the back of the obvious success indicators, there has also been a public outpouring of support for the plan. From E-Petitions on the official website of the Prime Minister’s office http://petitions.number10.gov.uk/scrappagescheme/ to the UK blogosphere, majority opinion seems to be in support of anything that gets the industry jumpstarted. In an unprecedented move, the editors and publishers of Britain’s biggest car magazines and websites have recently joined forces to urge the Government to support demands to stimulate new car sales in the UK.
When the scheme gets the expected go ahead, the voucher would apply to cars and light vans which produce more than 150g/km CO2 and which are more than eight, perhaps nine, years old. When consumers trade in their older, less environmentally-friendly cars, they would save up to £2,000 on a new or nearly-new vehicle. For this reason, scrappage should appeal to ministers since it would help the Government achieve its target of a 20% reduction of CO2 emissions by 2020 and furthermore a market recovery would see an increase in tax from car sales. This makes the scheme virtually self-funding, thanks to the resultant increases in VAT takings.
Will the bangers for bucks scheme be the savior some make it out to be?
We’re about to find out.
SOURCE: The Times | Vauxhall.co.uk
