Confusion over end of scrappage

CONFUSION reigns in the motor industry as to exactly how the end of the scrappage scheme will work.

The government announced last week that the last remaining portion of the £400m funds would be rationed and divvied up between manufacturers.

But – with less than six weeks to go until the end of the scheme – car manufacturer bosses still don’t know how much cash they will get and exactly how it will be decided.

Business secretary Peter Mandelson said last week the funds would be allocated based on ‘brand popularity’ – but what that means is still not clear.

‘We haven’t been told how the exit strategy will work,’ Mazda UK managing director Jeremy Thomson told Car Dealer.

‘Whether it’s allocated on the basis of a brand’s market share overall or market share of scrappage is still unknown. We want to ensure we get a fair portion of the money, but exactly how it will work is still not clear.’

UNCLEAR

Several other car manufacturers we spoke to today said they were in the same boat. But depending on how well a carmaker has done under the scheme pretty much dictated how they’d like to see the funds divvied up.

Some would prefer the remaining pot to be split in favour of those that have sold more cars under the scheme and others want it based on the market pre-scrappage. So sensitive is the subject, very few car makers would officially go on the record and give us a comment.

Hyundai – arguably the biggest sales winner under the scheme – did though: ‘We expect the government will consult with the industry to see how the allocation will work.

‘We would expect that the slots will be allocated according to the scrappage sales market share, as this is clearly the most logical and fairest way as it reflects the most likely usage of the scrappage orders.’

OFFICIAL WORD

A spokesman for the SMMT said: ‘It’s in the hands of the government. All we know is that it will be allocated in set quotas on brand popularity.

‘Our preference would be that it is allocated according to registrations under scrappage. We expect to hear more in the next week or so.’

But one of the biggest questions on the lips of everyone in the industry is why has this all been left so late? Did the government just assume the funds would run out and it wouldn’t have to worry about the end?

‘That’s not true,’ said a spokesman for the Department for Business, Innovation and Skills – responsible for the scrappage scheme.

‘When the scrappage scheme was announced, the idea was to get it in place as quickly as possible. Then, when it was extended in October, there were plans in place as to how it would end because when you put extensions in front of ministers decisions can go either way.

‘We will be having discussions with representatives of car manufacturers shortly about how the funds will be divided up.’

The spokeswoman added a decision would have to be made soon as the funds would be allocated in the next two to three weeks.

Unfortunately that means it looks likely car manufacturers and their dealers will still not know how much money they’ve been allocated until three weeks before the end of the scheme.

by James Baggott

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