He says creating consumer demand must be the goal of the government’s support package.
Here, in an exclusive blog for Car Dealer magazine, the Eward-winning dealer tells us why he backs our Scrap Scheme Now campaign.
WHERE the real problem lies at the moment is within the consumer market for all cars.
It’s simple economics of supply and demand.
To keep manufacturers afloat just to build vehicles that sit unsold in a field is rather a backward step.
What the scrappage scheme would do is stimulate that overall consumer demand – actually generate footfall through the showroom and bring back some amount of confidence to a public largely too nervous to make any form of sizeable investment right now.
The great thing about the scheme is that it’s much broader in its benefit than manufacturer aimed finance.
Not only does the car buyer make a significant saving on the purchase and get to own a much less polluting car with all the associated savings but RMIF figures suggest that the scheme would be self-funding for the government, based on VAT receipts (VAT? Oh yes, perhaps this will work slightly better than the two per cent cut that was going to cause a stampede to dealerships…)
Plus, the good news from the dealer’s point of view is that the scrappage scheme is proven to have a positive effect. You only have to look at sales figures from Germany to see how influential it’s been.
With a guarantee of 2,500 euros for a trade-in on any car over nine years old against a Euro 4 compliant model, last month’s sales across Germany were up 21 per cent!
This equates to record growth and is expected to contribute to a rise in annual sales of around 600,000.
Compare that to sales in the UK which were down year on year by a similar figure and it’s clear to see that action is needed.
At Lifestyle, sales have not suffered as much as they have across the board – with flagship Ford franchises we’ve benefited from the introduction of the ECOnetic range, including the award winning Fiesta that will return 76 mpg. That’s certainly helped attract the cost-conscious motorist.
However, without wanting to sound all Karl Marx, imagine the boost if those with the oldest and most polluting cars had access to a modern efficient vehicle with an initial outlay that seemed less daunting.
That’s the beauty of the scrappage scheme – it really would benefit all levels of customer, as well as removing nearly all non-catalytic cars from the roads, helping the government make a dent in its ever more unachievable target of a 20 per cent reduction in CO2 emissions.
Peter Isted, managing director, Lifestyle Europe
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