Inside take on scrappage
March 19th, 2009 by Richard Aucock
SCRAPPAGE plans for new cars are gathering momentum – so we sought the views of an industry insider.
Car Dealer Magazine contacted our source from Kia, who was ahead of the curve in predicting the importance of the scheme at the Geneva Motor Show.
‘It does seem to be growing large on the radar – there is expectation that something may be announced in the Budget in April.’
However, our source restated his call that it MUST be introduced immediately. Otherwise, ‘it will kill the market until the scheme becomes operational, as people wait to see if we manufacturers put anything further behind it.’
He also admitted that, while some are suggesting that dealers will use it to boost profits, ‘ I would counter that by saying the market is already competitive: if this comes in, it isn’t going to become less competitive.
‘Dealers were already giving away more than the 2.5 percent VAT cut – when you are in discount, you are in discount – and the same will be true of this.’
He also revealed an interesting fact about the likely people who’ll respond to such a scheme. ‘The people who will go for it will be looking for a very keen deal – they will NOT be normal new car buyers, so brand will mean less to them!’
And, whatever people say about the scheme not benefitting UK manufacturers, get real. ‘We have a motor industry in Britain, not a ‘British Motor Industry’, and the reality is the scheme will help the half million people or so working in and around the motor trade.
‘A lot of dealerships are in heavy weather and have been losing staff. It can only get worse, unless we do something to lift the trade.
‘That is what a scrappage scheme will do.’
Really, though, the scheme is all about consumer confidence. ‘New cars on the street and in the workplace car park lift people. They are talking points, and getting a boost back into the market will prompt the flow of lending, the aspiration of car owners and the enthusiasm of the trade.
‘Together, those things can start to turn round the general economy.’
Give us the scrappage scheme, say car buyers
Tags: buyers, government, new, scrappage