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UK Car Scrappage scheme being considered

The UK government and car manufacturing industry are currently considering the implementation of a part funded scheme to encourage new car sales, by allowing car owners to trade in older vehicles for more efficient, newer models.  The scheme would contribute £2000 towards the trade in, equally funded by the government and new car manufacturers.

The benefits of the scheme would be the boost to the car industry that’s currently suffering from the economic downturn as car sales have slowed considerably.  A secondary advantage would be the reduction in older, less fuel efficient vehicles on the road reducing emissions in the UK.  The older vehicles traded in would be scrapped so as not to transfer the problem to the second hand car market.

Germany recently introduced a similar incentive and this has been so successful that it’s now been extended.  New or nearly new vehicle sales have increased and the update from the offer has greatly encouraged German car manufacturers.  However, environmentalists have highlighted the fact that neither emissions nor fuel consumption has dropped since its introduction.  Insiders within the German government have also pointed out that such a plan may also be pushing the issue into different parts of the economy as a whole, rather than resolving the problem.

UK car manufacturers are less than happy with the proposal, stating that funding their half of the scrappage scheme on top of already heavily discounted vehicles could mean that some models will be sold at a loss.  In the UK, up to 75% of all vehicles are imported, whilst a large proportion of those manufactured here are exported, simply contributing to foreign vehicle makers rather than boosting the UK economy.  Further complications arise where manufacturers do employ UK workers to build their vehicles but which models mostly go abroad, leading to any benefits being indirect rather than direct.  One suggested solution would be to only apply the £2000 scrappage incentive to electric cars or hybrid vehicles, more squarely addressing the environmental issues of older vehicles on UK roads.

The UK government are due to announce a more detailed plan for Alistair Darlings’ Budget announcement in mid April.

Update: Manufacturers jump the gun on scrappage announcements.

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Related posts:

  1. UK Scrappage Scheme Now Official
  2. Worldwide Scrappage Scheme Update
  3. UK Car Scrappage Scheme Extended with a £100m boost

4 Responses to “UK Car Scrappage scheme being considered”

  1. Stacey Derbinshire

    Tuesday, 14th April 2009 at 9:45 am
     

    Can you tell me who did your layout? I’ve been looking for one kind of like yours. Thank you.

  2. Don’t you think this is a good idea though? – I dont know whether it will be a quick win, but it could change the way we look at motors for ever more. And perhaps more importnantly, if the Car Companies know they can sell these electric cars, then they will put more development into it.

    Keep up the good work.

  3. It’s a tricky one, I think the scrappage scheme is short sighted. Studies have shown that older cars have done most of their polluting already and as long as they’re reasonably well maintained they produce no more carbon than a brand new car. It seems like one way of avoiding bailing out the car industry, which simply makes too many cars and is now running into trouble. Almost as if the choice was the scrappage, or handing millions of pounds to try and keep UK jobs. We’re years away from adopting electric cars because there’s no infrastructure for charging and this will cost millions to implement. I had a look at it in a more recent post on electric cars in the UK.


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