Perspectives on car scrappage scheme extension

Wed, 30 Sep 2009



The UK car industry has reacted to the extension of the scrappage scheme in various different ways. The initial reaction to the car scrapping scheme caused a backlash of opinions from the car industry and the car finance industry, and the extension is proving no less controversial.

Several car manufacturers have praised the extension, with Kia, Nissan and Volvo all issuing statements. Trade and industry bodies were also jubilant. The head of Motor Finance at the FLA, Paul Harrison, was reported as commenting: "the extension to the scrappage scheme will be widely welcomed in the motor industry. The Government is also in talks in Brussels on additional support for the motor finance sector. We need Lord Mandelson to get a good result there, so that demand for new cars can continue to be met in the future when the economy recovers."

Meanwhile, the director of the Environmental Transport Association, Andrew Davis, reportedly commented: "This is little more than a panicked way of propping up the industry as, given time, those cashing in the grants would most likely have bought the new car anyway. Car scrapping initiatives are often mistakenly labelled as green because they subsidise the purchase of cars that are usually, more fuel-efficient than those they replace, but the schemes are by their nature wasteful and routinely fail to take into consideration the amount of energy required to build a vehicle in the first place."
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