Scrappage exit: The first plans
January 27th, 2010 by Richard Aucock
CAR Dealer Magazine has sourced official information on how the final stages of scrappage will operate.
Car makers have already agreed they will take part in a 2-phase quota system, to fairly allocate remaining subsidies.
Today, BIS has finally revealed the logistics of how this will all work. It points out, too, that it’s a decision reached by itself, as car makers could not agree on a basis for quotas!
HOW IT WILL WORK
• Quotas will be allocated from TOTAL PRIVATE RETAIL SALES between May-December 2009
• Phase 1 of Exit Stage: 80% of subsidies will be allocated proportionally
• Phase 2 of Exit Stage: Remaining subsidies will be allocated to manufacturers ‘who have proved particularly popular… those who have been less popular would get a smaller or zero additional allocation at this stage’.
The Exit Stage will commence when the 360,000th scrappage order is received. Phase 1 will then kick in – with Phase 2’s introduction entirely dependent on his this goes.
In short, Car Dealer Magazine sees the final scrappage orders being prioritised to the brands who have really done well under the scheme. They’ll be guaranteed a larger ‘share’ of the final funds.
Interestingly, there will be PENALTIES enforced from the start of the Exit Stage, too! These will be imposed on makers guilty of ‘artificially inflating order figures and thus ‘wasting’ orders that could be used by other companies’.
The quota system has been introduced, argues BIS, so both makers and car buyers can be clear how many scrappage subsidies are still left on the table. A smooth closure will thus be ensured.
What are your reactions to the Government’s decision for closing down scrappage?
Renault says scrappage will linger
Tags: bis, exit stage, new car scrap, scrappage