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Government already hailing scrappage scheme a success

According to government figures more than 35,000 new cars have been ordered through the UK’s scrappage scheme which started May 18th and ministers believe those cars would not have been sold had it not been for the financial incentive.

However motor industry figures are saying it’s too early to declare the scheme a success with Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, acknowledging that the scheme had enjoyed a “very encouraging” start but warning it could take a few months to fully assess its impact.

The government set aside £300m for the scheme, which was enough to fund discounts on 300,000 vehicles, with public funds providing £1,000 and manufacturers covering the remainder.
Carmakers had lobbied ministers to put in twice that amount to replicate the successful German scrappage incentive.

Despite the clear disappointment from the industry when the scheme was announced and – according to some surveys – a less than enthusiastic response from motorists, the government believes its plan has already secured extra sales.

As we have already said on MTI it seems to be mainly the small, economical cars that are the real winners in the scheme. These cars are the “go to” cars in a recession anyway and, of course, offer the lowest profit margins to manufacturers and dealers.

May 29, 2009In51der
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  • Government to discuss UK scrappage scheme
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