Calls to renew scrappage scheme
Carmakers are concerned that sales of new cars will decline once the successful scrappage schemes come to an end.
The BBC has reported that Ford and Toyota want the UK Government to extend the scheme.
The schemes, which were implemented to boost car sales, have been successful after the Society of Motor Manufacturers and Traders (SMMT) recently reported a further rise in UK car sales as a result of the scheme.
The scheme, which was launched on 18 May in the UK, pays consumers £2,000 to get rid of their old cars and replace it with a more environmentally friendly car.
According to the SMMT, car sales in August rose for the second consecutive month, up 6% compared with a year earlier.
Similar schemes have been launched throughout Europe. The €5 billion German scheme (the largest amount of any Government) ran out earlier this month.
Furthermore, the scheme in the US, branded the “cash for clunkers” scheme, ended after just a few weeks when the $3 billion funding set aside for it ran out.
John Fleming, chairman of Ford Europe, told the BBC: “We’ve been very happy and very grateful that Governments, particularly Germany and the UK, have put scrappage schemes into place.
“We’re worried that it’s going to stop very abruptly. So what we’d like to see is it extended for a period of time,” Mr Fleming added.
The UK‘s £300 million initiative is to run until March 2010 but the Retail Motor Industry Federation (RMIF) recently said the funding could run out by the end of the year.
Sue Robinson, RMIF director, explains: “The scheme has been highly successful, but with the retail economic climate still fragile, demand still growing, and an increase in VAT scheduled for 1 January 2010, an extension of the initiative is vital.”
The scheme proved so successful in Germany that many analysts said it had played a part in the economy’s departure from recession.
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