SCRAP: The industry's reaction

Time 1:08 pm, April 25, 2009

scrap-auto-trader-supportTHE scrappage scheme announcement we all knew was coming is here – so what does the industry think?

There’s been a mixed reaction to the £2,000 scrappage scheme which must be matched by car markers – £1,000 from the government and £1,000 from carmakers.

There are worries that manufacturers just won’t be able to cut the cost of their cars to match the £1,000 on offer from the Treasury.



Here is what the major players in the industry have been saying:

Paul Everitt, SMMT chief executive

The Society of Motor Manufacturers and Traders (SMMT) has welcomed government’s introduction of a scrappage incentive scheme to kick-start demand in the car and van market The scheme, due to start in May 2009, will see government offer a £1,000 incentive to be matched by participating vehicle manufacturers when scrapping a taxed, insured and MOT’d car or van over 10 years old which they have owned for at least one year.

This is good news for consumers and will get people back into showrooms, kick-starting demand in the market. The scheme recognises the economic value of the motor industry and we are determined to make it a success. There is clearly a great deal to do and we look forward to discussing the finer detail of the proposal with government in the coming days.

Daksh Gupta, Marshall Motor Company CEO

I am delighted to see that the Government has responded to the growing demand for this sort of scheme, which will help many of our customers and all sectors of the industry.  We are now working through the detail to see how this will work in practice, but we view it as an opportunity.

Neville Briggs, Pinewood managing director

If the new scrappage scheme proves as successful in boosting sales in the UK as similar initiatives have in other countries, then dealers are likely to see a sudden swing in the emphasis of their business away from used car sales and aftersales back to new car sales. They have a very short time to ensure that they have the best possible sales and marketing initiatives in place in order to maximise the opportunities that the scrappage scheme will present.

John Given, Manheim group sales director

We welcome any initiative that stimulates the new car market. The scrappage allowance could reduce our lower-value part exchange volumes coming into Manheim Auctions, but we do not believe this impact will be significant. However, any increased retail activity as result of this allowance will positively affect the marketing support provided to car dealers through Manheim Retail Services.

Tony Wilson, Chairman of Klarius Group

Making money available to stimulate the purchase of new cars in the UK is a false economy; it is a waste of public money, and contrary to recent positive coverage, did not benefit the German car industry when it was implemented there.

The UK has many hundreds of thousands of people employed in the automotive aftermarket industry. From roadside recovery, auto factors and distributors, to repair shops and fitting stations we have a major employment sector designated to the support of older vehicles.

The Institute of the Motor Industry (IMI) says:

There have been many arguments from across the sector for and against the introduction of a scrappage scheme, however we hope that today’s announcement by the Government will provide a boost to new car sales market and in turn have a positive impact across the automotive retail industry securing jobs and boosting consumer confidence in what is a dynamic sector of employment.

Prof Stephen Glaister, RAC Foundation director

Currently, the vast majority of cars are still on the road at 10 years old. Indeed, at 14 years old half are still on the road. The scrappage scheme announced today risks consigning a lot of perfectly good, and relatively clean, vehicles to the dustbin.

Whilst the announcement is good for motorists and the motor industry, if it does not encourage people to buy green vehicles it is a missed opportunity as far as the environment is concerned. However, if the scrappage scheme leads to a reduction in the average age of the national car fleet, then this has to be good for road safety, as more modern cars will have a wider range of safety features built-in.

Andrew Davis, Director of the Environmental Transport Association

It’s not just greenwash, it is hogwash. Many 10-year-old-cars have plenty of life left in them, so from a climate perspective, to scrap them is money poured down the drain.

Faye Sunderland, editor of

Without setting a limit on the CO2 emissions of the new cars bought under this scheme, it makes a mockery out of the government’s said commitment to developing this country as a leader in green motoring. The scrappage incentive is now meaningless as it will not necessarily encourage the sale of greener cars. It is senseless to introduce the scheme in such a way.

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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.

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