Scrappage scheme launched in Britain to save car industry
- Source: Xinhua
- [07:43 May 22 2009]
- Comments
BUSINESS SAVIOUR
Scrappage incentives have been in place in many European countries, including Austria, France, Germany, and proved to be effective in boosting car sales.
Britain hopes, that by adopting the scheme, it will bring a new life to its own car industry which has been battered severely during the recession.
The automobile sector, which accounts for more than 11 percent of the country's total exports, is a vital player in Britain's economy,
There are 27 car and commercial vehicle manufacturers operating in the UK, and 75 percent of all UK vehicle production is for export to more than 100 markets around the world.
In the first four months of 2009, the British automobile industry suffered a 28.5 percent market shrinkage on year. In April alone, new car registrations dropped by 24 percent, the lowest April market since 1991.
Last month the Ford Focus returned to the top spot as the best selling model for the first time since July 2008. And the Ford Fiesta remains the UK's best seller over the year-to-date.
"Despite the tough conditions, the industry is hopeful that its prospects will improve in the coming months and the steps it has taken will provide the basis for a sustained recovery once growth returns," said SMMT Chief Executive Paul Everitt.
"The UK motor industry remains of strategic importance and will play a key part in generating jobs and prosperity into the future, " he added.
The UK was the third largest car market in the EU in 2008, with 2.13 million new cars registered, equating to 14 percent of total European vehicle registrations.
The European automobile industry, which provides 2.3 million direct jobs and has 250 vehicle plants and 8,000 equipment makers, has reported falling business, though not as serious as seen in Britain.
Some 1.25 million new passenger cars were registered across Europe in April, down 12.3 percent compared to 2008, according to figures released by the European Automobile Manufacturers' Association (ACEA).
The downturn was more marked in the new EU member states than in western Europe, where Austria and Germany were the only countries to see growth, reflecting the effects of scrappage incentive schemes in place, said the ACEA.