Blog: Dave LeggettPrever scrappage incentive in Spain

Dave Leggett | 20 December 2004

I was chatting to Pete Kelley over at JD Power-LMC (Oxford, England) this morning about the Spanish car market - we've a feature on Spain in the works and I wanted to check a few things. In particular I was interested in the Prever scrappage incentive which amounts to a government subsidy on new car sales where an old car is taken out of the parc and scrapped. There's an environmental angle (removing old and dirty vehicles from parc), but such schemes tend to be more about stimulating the market than anything else. Variations on the theme have been employed in Spain, France and Italy at times over the past decade. And I almost forgot Denmark and Ireland for a second there.

Pete said that just under 30% of new car sales in Spain this year have gone through on the scheme. But would those sales occur without that incentive? That's the 64,000 dollar question, especially when there are other factors at work driving the market, like low interest rates and a strong economy. Looks like the Spanish new car market is set to hit 1.5 million units this year, 10% up on last year. 

One thing Pete was unsure about was whether or not the Prever incentive is actually ending on 31 December this year. If it is, a pull-forward effect on new car registrations could be expected before the deadline. It is quite likely that it will simply be extended into next year, but does anyone out there actually know what the position is? If you do, perhaps you could drop me a line...and I'll let Pete know also.

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