Merc MD: Extend scrap
September 21st, 2009 by Richard Aucock
MERCEDES UK MD Dermot Kelly has added his name to the list calling for a scrap extension…
…But there’s a twist!
Not only would the Mercedes UK chief like to see the scrappage scheme continued but he’d also like to see it revised to be fairer on all manufacturers.
‘Our preference would be for it to be on a sliding scale compared to price,’ he exclusively told Car Dealer at the Frankfurt Motor Show.
‘VAT increases as the price of cars increase and that’s the way I’d like to see the scheme run – so that there’s more contribution the larger the car’s price.’
Effectively what he’s saying is as the price of the car bought under the scheme goes up, the contribution from the government and carmaker goes up too.
‘At Mercedes we did not anticipate we’d do a high level of volume under the scrappage scheme, but we’ve even sold an SL63 on the scrappage scheme,’ he added.
‘But there is a tendency for it to benefit smaller cars, from Kia and Hyundai for example, and less so for brands like us.
‘A sliding scale would help with UK production too as there are predominantly larger cars built in the UK.’
But whether it needs tweaking or not, Kelly is adamant the scheme needs to continue one way or another until the market picks up. Manufacturers estimate that at the current rate the scheme will end in late October – five months EARLY!
Kelly said: ‘Scrappage has re-energised the market. It has caused a lot of people to actually feel comfortable about buying a new car. I’d like it to continue and we support the SMMT’s view that when it runs out it should carry on.
‘If the average car sold under the scheme is £7,250 or more, then the Exchequer is getting back more or as much in tax as their scrappage contribution so it’s no real skin off their nose.
‘The scheme is revitalising a vital part of the economy.’
EXCLUSIVE by James Baggott
Tough times ahead mean scrappage vital
Scrappage: Mandy meets dealers
Tags: frankfurt, mercedes, new car scrap, scrappage
 |  |  |