There can be no doubt about the real beneficiaries of the UK scrappage scheme. It’s not the punter as in a lot of cases he may have got more than £2000 for his car under normal circumstances and probably would have got a bigger discount on new. It’s probably not the environment; I’m wearing gloves as I type this so I can see why they quietly changed the name from “global warming” to “climate change”. It is of course, in the main, Korean manufacturer The Hyundai-Kia Automotive Group.
They’re the big, big winners, blowing all competition to smithereens with container ship after container ship of shiny new cars arriving in UK ports week after week. It’s not just the UK where Kia and Hyundai have dominated the competition either; in Germany Kia’s new-car registrations were up 65.5 percent to 51,338 units through to November thanks of course to the Umweltprämie that slashed 2,000 euros off the already affordable Picanto minicar and Cee’d.
But what happens when the scrappage scheme ends and not so many people want to buy their cars anymore?
Well the Korean scrappage powerhouses are already one step ahead with Kia announcing that, starting January 1st, they are offering 7 year warranties on every single car they sell in Europe. This quite remarkable warranty only used to cover the Cee’d and Sportage followed by 5 year warranties on the Soul and Sorento and more run of the mill 3 year warranties on the remainder of their models but will now cover all models in the range.
In a statement Kia Motors Europe Chief Operating Officer, Paul Philpott, said the new incentive is part of the Korean automaker’s aim to become No. 1 in the world for “customer satisfaction”.
Of course the much feared nose dive in sales at the cessation of various European scrappage incentives will have had a large bearing on the decision to offer the elongated warranty across the product range.
The widely held notion is that a lot of the car purchases made in 2008 were simply brought forward and thus created an unrealistic spike in sales, amongst other things. This means a lot of manufacturers will be thinking long and hard about maintaining sales volumes and the fight for market share in 2010 and 2011 is likely to be a magnificent and, dare we say it, costly one.
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