Scrappage debate hots up

Hot on the heels of the comments against a scrappage scheme made by Brian Spratt, chief executive of The Automotive Distribution Federation, British Vehicle Rental and Leasing Association CEO John Lewis has come out in favour. Seeing it from his members point of view, he believes that a scrappage scheme would see “…fleets obtaining better prices for their one, two and three-year-old vehicles, and give them the confidence to go out and buy new cars and vans.”

Emmanuel Lewis, fleet manager at Vista Retail Support, said he would welcome the initiative if it was “correctly administered and fairly run”.

However, contradicting the BVRLA CEO Emmanuel Lewis doubted its affect on residual values if the supply of what he called the “£500 car” runs out and that’s all somebody could afford.
He also pointed out that“..either you price out of the market a whole group of people from car buying or car prices fall to fill the gap, and if that happens it will affect all car values.”

He makes an interesting point. If so many of these old bangers are scrapped it stands to reason that the prices of the ones that are left will go up.

Nigel Stead, chief executive of Lloyds TSB Autolease/Lex, said any UK scheme would have to encompass used cars up to four years old in order to make it a viable proposition.

“Unlocking the used car market would, in our view, be the most efficient way to affect positively the new vehicle market,” explained Stead.

From MTI's point of view, as we have said before, limiting the scrappage scheme to 9 years and older is probably only going to have a limited effect on new car sales, if any. Four years would obviously have a dramatic impact but would open up a whole new can of worms for the after-market.
There are clearly lots of opinions being expressed, positions being taken up and vested interests being served. Of course if we do end up with a scrappage scheme in the UK we can be fairly certain, if this governments track record is anything to go by, that it will be a watered down version which will end up doing nothing (apart from providing work for some scrappage czar and his retinue of “administrators”).