Almost a third of car buyers are stalling purchasing in the hope of an incentive package along the lines of the scrappage scheme.
That’s what emerged from a What Car? survey of thousands of people for its latest Weekly Insight report (Jun 10).
The poll of 6,632 in-market car buyers found that just over 29 per cent of them who were looking to buy their next car had decided to hold off in case some kind of incentive such as a scrappage scheme was announced by the government.
In the report, Rachael Prasher, managing director of What Car? and Haymarket Automotive, said that a major obstacle to the industry’s recovery was ‘an apparent lack of government action on a potential stimulus package’.
Drawing comparisons with the 2009 scrappage scheme, she pointed out that back then France and Germany were the first to announce multi-billion-euro incentives to boost sales, with the UK soon following because it had to.
Fast-forward to 2020 and Germany and France are once again pumping billions into their respective automotive industries to revitalise them.
Prasher says the scrappage scheme of 2009 ‘propped up sales after new car registrations had fallen to 30 per cent of their levels from the previous year. We’re in a deeper dip – significantly deeper.’
She adds: ‘News of the incentive schemes on the continent, and subsequent chatter among the industry and in the mainstream press, naturally leaks into the market – and potential car buyers are watching with interest, inevitably impacting sales activity.
‘Of course, any incentive needs debating and careful consideration, but what’s clear is that the time being used to do this is delaying purchases.’
With July 6 mooted as the day when the UK government unveils its plan, Prasher says: ‘It can’t come soon enough; certainty one way or the other is looking increasingly important.’
She comments: ‘While the initial bounce since dealerships opened has been welcome, it is clear that clarity here could significantly help to further unlock the market.’
In a recent video interview with Car Dealer Magazine, Alison Jones, group managing director of the Peugeot, Citroen and DS brands for PSA Groupe in the UK, said exactly the same thing, warning that consumers may well delay buying for fear of missing out on a scrappage scheme.
Jones emphasised that such a scheme was needed sooner rather than later to help the market:
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