SCRAP: Taken to No. 10!
April 3rd, 2009 by Richard Aucock
CAR dealers have taken their call for a new vehicle scrappage scheme to the heart of Government.
An online petition has been set up, imploring the PM to launch the new car sales incentive.
Set up by digital marketing specialists iDealer, the petition calls for the Government to offer buyers £2000 towards the purchase of a new car, if they scrap one nine years or older.
The Government needn’t fear, as the scheme would be virtually self-funding because of increased VAT takings.
And what an effect it would have, continues the petition: Germany reports an extra 400,000 cars have been sold because of a scrappage scheme over there.
This would give customers better and more reliable cars, while makers and dealers would benefit from all the extra sales – securing jobs.
‘It’s something of a no-brainer’ states the petition.
Car Dealer Magazine has signed up. Want to do so yourself? You can do so on the official Number 10 website.
SCRAP SCHEME NOW: A call to arms
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Tags: government, scrappage, Scrappage
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April 3rd, 2009 at 7:00 am
The Bye-Buy Bonus or Car Scrappage scheme being called for by the SMMT and most of the UK car industry is “barking mad”, claims Ling Valentine, a female Chinese immigrant who runs the UK’s favourite car leasing website, LINGsCARS.com.
The UK car industry, let by the Society of Motor Manufacturers and Traders (SMMT) and the Retail Motor Industry Federation is calling on the Government to follow the path of European counterparts and set up a similar incentive scheme to reward consumers for scrapping an older car in return for buying a brand new vehicle.
These calls come against a backdrop of falling car production; UK figures show a drop of 59% in February 2009 compared to the same month in 2008. Only 59,777 cars were produced in the UK last month according to the SMMT.
A lone voice within the UK motor industry, Ling Valentine (35), the owner of a successful car leasing website which moved over £35 million of new cars in 2008 at retail prices, takes a quite different view to the “childish” arguments that she claims are being wheeled out by the rest of the industry.
“All the motor industry is concerned about is short-term gain at the expense of everything else”, claims Valentine. “There are three main areas where they are simply wrong, and the use of spurious economic and environmental arguments by industry big-wigs is frankly, shocking”.
With a Masters degree in Environmental Quality and a 2008 motor industry environmental award under her belt, plus queues of customers to take her cheap personal online car leases – effectively fixing consumers’ motoring costs in concrete for 2 or 3 years – Valentine outlines her objections;
“First, it would be an environmental and economic catastrophe to reward people for scrapping perfectly roadworthy older cars, which would otherwise give years of useful service. If they claim this will reduce CO2 by replacing more polluting cars with newer cars, you have to wonder what planet they live on. The flagship UK-based car companies looking to benefit from this scheme are Land-Rover and Jaguar, both owned by India and both of which make large gas-guzzling cars. Why on earth scrap an old Land-Rover, cars which traditionally have a very long service life, just to build a new one?
“Second, the sales increase a scheme like this would cause may be real in the short-term, but it is artificial. Like other fiscal benefits such as a reduction in house-buying stamp duty, a bye-buy bonus would simply concentrate sales into an artificial time-frame, leaving people who bought cars before the scheme financially worse off and creating a desertification of the car market when the scheme terminates. There would be a deluge of sales, followed by a long drought – which would create further car production turmoil.
“Finally, you have to ask who would benefit? Imported cars make up the vast majority sold in the UK, today. For instance, Ford does not produce a single car in Britain; every new Ford car is imported. A temporary sales-boost will simply benefit foreign car manufacturing plants, with little benefit to British workers. All this would be subsidised by the British taxpayer.
Valentine summarises; “All in all, this scrappage scheme is a short-term, short-sighted fix to a much larger problem created by overproduction, blinkered design, and greed. You have to ask, why not take it a step further and pay people substantial cash bonuses to scrap perfectly good TVs, fridges, radios and kettles, or even subsidise people swapping old knickers for new at Marks and Spencer. Clearly this whole rationale is complete, utter economic madness.
Most commentators, however, have been pushing the car industry’s case. Paul Everitt, Chief Executive of the SMMT said, “In Germany the success of the scheme saw registrations climb 21.5% in February, up for the first time since July 2008, enabling vehicle manufacturers to postpone planned cutbacks.”
“Meanwhile, Britain’s registrations fell at the same rate that Germany’s rose – leading to redundancies, reduced shifts and pay cuts. The motor industry seeks a co-ordinated European effort to stimulate demand, and to date Britain is the largest new car market not to respond.”
Countering the environmental argument, Everitt claims that, “In fact, the environmental credentials of such a (scrappage) scheme are widely recognised.
“In 2008 average UK new car emissions fell by their biggest ever rate. The fall of 4.2% was achieved steadily throughout the year as an increasing array of environmental products were launched. Although the number of cars on the road and average journey distance may have increased, emissions from road transport continue to fall.
Ling Valentine remains unconvinced; “If the car industry has massive oversupply then compressing new sales into an artificial period by throwing massive taxpayer subsidies and bribes at a scrappage scheme will simply reward bad planning and bad management. They can’t keep churning out too many new cars that people are reluctant to buy and think that crushing tens of thousands of reliable older cars can solve the problem.
“If a carefully looked-after 15 year-old car has another 5 years of life left in it, why subsidise crushing it just so someone in Japan, America or Europe can build a new one in order to rake in the profit? It’s completely barking.
April 3rd, 2009 at 7:56 am
Agree or disagree with Ling? Let us know.