News

Delaying decision on a scrappage scheme will have a negative impact on new car demand, says Groupe PSA boss

Time 1 year ago

A scrappage scheme or other stimulus package needs to be announced sooner rather than later – otherwise it could have a negative effect on the market.

Alison Jones, Groupe PSA managing director, told Car Dealer Magazine in an exclusive video interview (which you can watch above), that she believes there is appetite within the government for a support package for the car industry.

However, she is concerned that the longer a scrappage or similar scheme is talked about, the more customers could hold off car purchases in the hope that big discounts are on the way.


Echoing the thoughts of Jaguar Land Rover UK boss Rawdon Glover, who told Car Dealer he wanted a scrappage scheme in place by July 1 at the latest, Jones agreed that date would give manufacturers time to boost September new car sales.

She said: ‘The first of July was a suggestion and is linked to the September car market, but what I would say is that any decision needs to be made sooner rather than later, because if customers think there is a stimulus package coming then that won’t help us in getting the industry started. 

‘We’ve already seen that in some of the other countries where the rumour of a stimulus package has been discussed, but it has gone on for some weeks. 

‘All that has done is dampen down any market that we have got. So we need to be responsible for this ourselves and get our part of the economy moving.’

Advert

German car makers have been in intense talks with the government there about a stimulus package for the car industry and a decision has been delayed until later this month.

German dealers reported empty showrooms and few enquiries when they reopened at the end of April. 

Jones added: ‘If we’re coming out of lockdown there will be some pent-up demand from customers who were making a decision at the point we went into lockdown, and we have customer vehicles that are due to be handed over, so you might think that there will be a little rally, but then it will get really difficult.’

Unlike other car manufacturer bosses we have spoken to, Jones thinks whatever package is introduced needs to target the lower end of the market. 

She said she thinks the scheme needs to have ‘a cap on the value’ of the cars it is incentivising customers to buy.

She added: ‘It needs to help the people who need the help the most – that’s what we’re working alongside industry colleagues in putting into government.’

Jones believes there is an appetite within the government to help the car industry, but the type of cars it incentivises customers to buy will be critical too.


She said: ‘We want to be responsible for kick-starting our industry ourselves. We would say it needs to be around CO2 and not just ultra low emissions vehicles.

‘I think they recognise the automotive industry is a key pay in getting the economy moving, so I think they are interested in a discussion, whether they will ultimately support it, I don’t know.

 ‘I think it absolutely needs to be around the environmental credentials that we have been working to as an industry.’

Yesterday, Car Dealer Magazine investigated what could happen to new car sales for the remainder of 2020 and beyond.

Get more from Car Dealer

  • Premium stories
  • Used car data
  • Magazine early access

Speaking to dealers, manufacturers and experts including Daksh Gupta, Robert Forrester, we report on their thoughts for the troubled market. Most believe a scrappage scheme or similar is needed to revive the market. To read the full investigation click here.

Guide: Is a new scrappage scheme to boost car sales likely? And what would it look like if it was introduced?

JLR boss wants scrappage scheme-style stimulus in place for July

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

More stories...

Advert
Server 51