Why car scrappage is now inevitable March 27, 2009
Posted by richard in : Uncategorized , trackbackIt is now a matter of when, not if, the Government introduces a new car scrappage scheme. Because, such is the momentum now behind it, to not go ahead would be disastrous.
Renault has recently had to boost production of the Clio by nearly 10 per cent, just to meet demand. This comes on the back of previous swingeing cuts in car production.
And that’s just one example, of many. Ford’s Fiesta plants are working flat out and still struggling to meet demand. The Peugeot-Citroen-Toyota plant in the Czech Republic, which makes the sub-110g/km CO2 city trio, is also upping numbers. And so on.
Contrast this with new car sales in general across Europe. They fell by 22 percent. Manufacturers have responded to this, by cutting production. Officials say new car build has dropped by 40 percent.
Honda has even closed its Swindon Civic factory entirely for a third of the year.
But countries which have a scrappage scheme have seen the opposite. Sales in Germany last month rose by 21 percent.
Who has a scrappage scheme, then? Austria. France. Germany, obviously. Greece. Italy. Portugal, Romania. Spain. It’s hardly small fry. Not some harebrained scheme thought up by the SMMT. It works.
Remember the VAT farce? The Government announced it last year… weeks ahead of time. So, customers stopped buying until it came into forge. Big ticket items such as cars were particularly hit.
Chairman of Ford Retail, Chris Hayden, told me that car sales ‘simply stopped’ in November, as buyers waited for the VAT cut to kick in.
The risk is, such is the expectation of a £2000 rebate for those buying a green new car if they scrap their old one, confidence would simply collapse if the Government chooses not to do it.
This would be the exact opposite of intentions, and really threaten the future of an industry already under massive pressure. This is why such a scenario will not exist. This is why the Government will go ahead with it.
A scheme will be announced one day, and take effect the very next. Sending out a clear signal that it is OK to buy new cars. The Government will recoup the money in VAT. Buyers will get greener new cars. Dealers will survive. The environment will benefit. It really is win all round.
Surely the Government has to follow logic, rational argument and the public mood, by rolling out the scheme soon?
Comments»
Except everyone seems to be overlooking the fact that all these new cars will use more energy to build them in the first place than they will ever save in their lifetimes, and a lot of perfectly serviceable vehicles will have to have enormous amounts of energy expended on them trying to recycle them…
Interesting argument – Volvo said to me that, of lifecycle emissions, 85 percent from a car comes from its in-use actions, with 10 percent from making it, and 5 percent from recycling it. It’s thus much better for the planet, they say, to get people into cars which consume much less fuel… which, hopefully, the scrappage scheme will do! If everyone were to drive sub-120g/km CO2 cars, there would be a big cumulative positive for the environment, both in terms of oil consumed and emissions produced.
Never an easy circle to square… what do you think?
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