“Moribund” car industry in need of resuscitating. Is a scrappage scheme the answer??

“Moribund” car industry in need of resuscitating. Is a scrappage scheme the answer??

As has been widely reported, the Government is being lobbied by the car industry to re-enact a scrappage scheme (or “cash for clunkers” as I like to call it). The proposal is pretty straight forward and is similar to the one introduced back in 2009; an older, more polluting car can be traded in at any dealer with £2500 off the sticker price of any new car. While the original plan in 2009 was intended to encourage the purchase of newer, more environmentally friendly vehicles today’s push for a scrappage scheme is to kick-start the moribund car industry. Further, while the Government and environmental groups have actively pushed for the adoption of cleaner vehicles to co-incide with the net zero emissions target by 2050, the proposed scrappage scheme today would also include a £2500 price cut off all types of vehicle – petrol and diesel included – and not just electric vehicles (EVs).

While I welcome the plan, it does highlight two main points. Firstly, it’s clear that the UK car industry is hanging on by a thread. With consumer confidence at levels not seen since the financial crisis, car sales have taken a massive hit. The car scrappage scheme isn’t the perfect fix but could go someway to get buyers who are, at the very least, tempted to purchase a new car back into the showrooms. Secondly, that both petrol and diesels would be included in the scheme highlights that the car industry is well aware that today’s car buyer isn’t ready to take the plunge and buy a pure electric vehicle. In 2019, 90% of all car sales in the UK were either petrol or diesel. Despite more EV models to choose from, the likelihood of any meaningful dent to last year’s sales figures – with a Covid19 backdrop – is slim at best.

At this juncture, anything to help the car industry should be welcomed. And a scrappage scheme should be at the top of the pile.

As always, keep calm and drive on!

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