We in the motor trade can clearly see and feel the benefits of the scrappage scheme, and although Michael Hanlon, writing in the Daily Mail (How the bangers for cash scheme BACKFIRED) is clearly not a fan, he seems to miss much of the point.
Without going into whether the scheme has truly had a benefit to the environment, although taking out lots of older less economical and ‘dirtier’ cars would clearly have to have had some effect, the impact on the car industry and therefore to the economy has been dramatic.
He states in his article that the real winners are Korean car makers like Hyundai who have seen sales rise 102% and shifted 40,000 units, but we don’t really have a UK car manufacturing industry anymore so surely customers having the chance to buy a brand new car for under £5,000 and at the same time keeping plenty of people in work is a good thing?
Michael Hanlon makes the point that subsidising a Korean firm probably isn’t the best use of the UK taxpayers’ £400 million and that the counter argument put forward by scrappage supporters, that extra VAT revenue from the sales of new cars has offset the cost, doesn’t stack up. He believes that if car buyers who took advantage of the scheme hadn’t done so they would simply have spent their money on something else “..a foreign holiday, new clothes or a home extension”. How can he know this? Is it merely a device he has used to dispute the net benefit to the treasury in monetary terms? Perhaps.
What he also probably doesn’t know and so therefore fails to mention is that franchised car dealers in the main have had very profitable results due to scrappage in one way or another and you only need look at the recent results of the big 3 dealer groups in the UK to see how their prospects have changed.
Peter Mandelson may be the most powerful unelected deputy since Henry VIII appointed Cardinal Wolsey and divide opinion only in degrees of loathing but what if the government had stood by and done nothing? Jobs would have gone in their thousands, car dealers would have gone bust and the car industry would have been on its knees maybe never to recover. Focusing on the benefit to Korean manufacturers is probably a typical
Daily Mail approach but, although they did very well out of the scheme, so did many other manufactures as the top ten scrappage manufactures reveals.
But luckily for all concerned in the UK automotive industry they didn’t just stand by and watch they did something and I personally think it is incredible that with all the bad things which are going on in the economy like bankers bonuses and cheating politicians, Mr. Hanlon chooses to criticise a scheme which has genuinely helped the car industry and, lest we forget, consumers.
Having seen the joy on customers faces as they pick up their brand new car I know that they may never have been able to afford a brand new car had it not been for the scheme and probably won’t enjoy that particular pleasure again.
Which is OK because at least they have a seven year warranty.