The scrappage incentive scheme announced in last month’s UK Budget will begin on Monday (18 May), offering owners of cars and small vans over 10 years old GBP2,000 (about US$3,000) off the price of a new vehicle when scrapping their existing model.
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The scheme has been welcomed by the local motor industry which had long been calling for government support to boost consumer confidence and kick-start demand after 11 months of falling registrations.
Vehicle manufacturers have already reported increased enquiries as potential buyers look to take advantage of the scheme, the Society of Motor Manufacturers and Traders (SMMT) said.
“The scrappage scheme is good news for consumers and the UK motor industry alike. It has already started to get people back into showrooms to kick-start demand in the market,” said CEO Paul Everitt.
“There has been a good response to the scheme ahead of the official start date and [the auto] industry is confident that this will be translated into additional orders.”
The scrappage incentive scheme is optional for both manufacturers and car buyers but for those brands taking part, the discount will apply to their entire vehicle range. All major vehicle manufacturers have indicated to SMMT that they have signed up to the scheme and will be offering at least GBP2,000 off the list price of their vehicles to customers scrapping their current model.
Orders can be placed under the scheme until 28 February 2010, or until the GBP300m government fund runs out.
Vehicles traded in must have been first registered in the UK before 31 August 1999; registered in the UK to the person making the claim and owning the new vehicle for the previous 12 months; fully ‘MOT’d’ [passed a government roadworthiness test]; taxed and insured (all of which dealers can check on government databases].
Citroën’s UK unit implemented a scrappage scheme in advance of the budget announcement from 1 April. The scheme resulted in a 15% increase in registrations in April.
Ford experienced the same number of hits on its scrappage web page within five days of the Budget announcement as it had previously on its most popular page (new Fiesta) throughout the whole of March.
Honda said it was seeing a significant level of interest – around a 15% increase in sales enquiries after the initial announcement. Most enquiries were for the new Jazz – its smallest model – but there was also a good spread across the range.
Hyundai said ‘expressions of interest’ with dealers reserving cars were up more than 400% on normal. Some dealers were reporting more than that, and have already sold their entire 2009 allocation of some models.
Renault UK saw a 30-60% increase in showroom traffic and website hits were up 50%.
In the few days that ‘register your interest’ was live on the Škoda website, over 1,000 people signed up. There was also a good response to the web pages about the scrappage scheme offer.
A rural Suzuki dealer reported a large increase in orders from his previous one new car per week to two per day.
Vauxhall’s scrappage web page had close to 60,000 hits since the scheme was announced on 22 April.
