Scrappage scheme launched in Britain to save car industry

• Source: Xinhua
• [07:43 May 22 2009]
• Comments

Britons now can scrap their old cars and drive off a new and more environment-friendly model with a 2,000 pound ($3,100) discount.

This came following the official launch of a scrappage scheme by the British government early this week, an incentive which has proved successful in many other European countries.

Its introduction is highly expected to salvage the British ailing motor industry by boosting consumer confidence and kick-starting demand for new vehicles.

Announced in last month's 2009 Budget, the 300 million pound ($435 million) scheme will run until March 2010 or until the government funding has been exhausted.

WIDE PARTICIPATION

The 2,000 pound grant is made up of 1,000 pounds from the government, with matched funding from car manufacturers.

Though participation in the scheme is voluntary for manufacturers, dealers and motorists, its adoption has been widely welcomed and supported in Britain.

Business Secretary Peter Mandelson has expressed his delight in the response of the motor industry, saying "38 companies have signed up - all the major UK car manufacturers and a number of other companies. This means more choice for consumers and a boost for British brands."

"The scheme has been met with a flood of enquiries from customers. It will provide a boost to the industry and kick-start sales," he added.

"The scrappage scheme is good news for consumers and the UK motor industry alike. It has already started to get people back into showrooms to kick-start demand in the market," said Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT).

"There has been a good response to the scheme ahead of the official start date and industry is confident that this will be translated into additional orders," Everitt added.

Citron implemented a scrappage scheme on April 1, three weeks earlier than the announcement of the 2009 Budget. The company has seen a 15 percent increase in registrations in April due to the incentive.

Ford experienced the same number of hits on its scrappage web page within five days of the Budget announcement on April 22, as it had previously had on its most popular new Ford Fiesta page throughout March.

Honda is seeing a 15 percent increase in sales enquiries since the initial announcement. Most enquiries are for Jazz, its smallest model, but there is also a good spread across the range, including its British-built Civic and CR-V models.

Renault UK has seen a 30 to 60 percent increase in showroom traffic, and website hits are up 50 percent.