The scrappage scheme could be extended way beyond its February 2010 end date if industry chiefs get their way.
Calculations by the Society of Motor Manufacturers and Traders (SMMT) show that the Government will make a net benefit of £193 million from the scheme that started on Monday. The trade body will push for Alistair Darling (right) to roll this back into the scheme to prolong it – if it proves successful.
The SMMT says that while this will initially cost the Government £300 million, it will make a net benefit from VAT returns, savings from fewer accidents as motorists migrate to newer, safer cars and in long-term healthcare gains because the newer cars will emit fewer harmful emissions, resulting in fewer hospital admissions.
The SMMT is cautiously optimistic that the scheme will boost sales but concedes that some extra sales were a result of pent-up demand. “Our proposal went out in February and some will have held back from buying a new car in case they qualified,” said the spokesman.
Thirty-nine car brands have entered the scheme, with only luxury car-makers such as Rolls-Royce, Aston Martin and Ferrari declining. Last-minute doubts over VAT arrangements delayed participation by Ford and Honda on launch-day. Both were back in by Tuesday.
In the first 24 hours of its full participation, Ford said it had taken more than 3,000 extra orders.
Source: Daily Telegraph
Scrappage scheme participating manufacturers