UK motoring magazine publishers Haymarket Media Group and Dennis Publishing have joined forces with the Society of Motor Manufacturers and Traders (SMMT) to call on the government to boost car sales with a scrappage scheme, offering buyers GBP2,000 to trade in their old vehicles for a new or newly new model.
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Similar schemes in Germany and France have seen sales rise 20-40% a month so far this year and could add as many as half a million sales in Germany alone in 2009.
The enthusiast magazine publishers said the scheme, proposed by the SMMT and supported by motor manufacturers, would help jump-start the market and be a good thing for “UK plc and its workforce.”
What Car? editor Steve Fowler said: “It is a fact that older cars are more polluting, more expensive to maintain and less safe than newer, cleaner, more reliable vehicles. Under the scrappage incentive scheme, owners of older cars would be given a huge incentive and opportunity to change to a safer, cleaner, more economical, hi-tech vehicle.”
The magazines are carrying an open letter to the government and are urging readers to sign a petition in favour of a scrappage incentive.
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By GlobalDataSMMT chief executive Paul Everett confirmed that he would like to see the scheme applied to cars up to a year old and urged the government to announce a scheme in the budget statement due on 22 April.
He added that he would like to see implementation as soon as possible afterwards to prevent a complete drop in orders during an interim period.
A scrappage scheme has widespread approval from car companies although critics have said it would do little to help vehicle manufacturing in the UK as Britain largely does not make the small, low emission vehicles that are now selling well on the continent.
VW UK head Robin Woolcock said: “I think this proposal is a win-win for the government. It would be good for sales and it would be good for jobs in the UK. This is not just about manufacturing, I would suggest that the vast number of people employed in the industry work as salesmen or technicians, or in distribution and finance in towns and cities all over the country.
“We desperately need to get the system working again.”
Ford spokesman Oliver Rowe said the company’s engine plants at Dagenham and Bridgend, which make motors for the Fiesta and Focus, are already attracting increased orders from the European car assembly factories.
He said it was possible some carmakers may try to match government measures with financial support of their own to try and boost sales of larger models.
AA president Edmund King said that raising finance continues to be an issue and still affects people trying to buy new cars.
“A scrappage incentive can work but the finance needs to be available.”
Industry commentator Garel Rhys has doubts about a scrappage scheme which he said would have no benefit for the car manufacturing industry in Britain.
He said: “86% of the content of new cars made here come from outside the UK while 70% of the vehicles we make are exported. By introducing a scrappage scheme, the British taxpayer would effectively be protecting and creating jobs in foreign factories.
“Germany may offer EUR2,500, but people are not going out and buying Mercedes C-class, they are buying smaller cars. As well as consumers, the winners are German companies and manufacturers like Ford with the Ka and Fiesta, Volkswagen with the Polo and Opel with the Corsa.
“It’s a similar story in France where consumers are snapping up small cars from Renault, Citroen and Peugeot. What do we have that would benefit in the UK? The Nissan Micra is being run out at Sunderland – and it only has 2.5% share of its market anyway – while the Mini is actually quite expensive.”
Rhys conceded that an incentive would help dealers and boost sales, however, but also questioned how long such a scheme could last.
Everett said that while it was not possible to predict how long a recession would last, he hoped that an incentive scheme could be run at least to the end of this year and for up to 18 months if necessary.
