Motor industry welcomes government support announcement but stresses further action is vital

27 February 2009 #SMMT News

The Society of Motor Manufacturers and Traders (SMMT) today welcomed government’s announcement from the Department for Business, Enterprise and Regulatory Reform (BERR) activating the £2.3 billion of loan guarantees announced in January, but urged government for immediate action on outstanding proposals aimed at stimulating market demand.


“The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical,” said SMMT chief executive Paul Everitt.


“There is a real need to ease consumer credit and attract customers back into showrooms and we urge government to move quickly and implement industry proposals,” he continued. “Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive.”


Following approval by the European Commission, automotive companies throughout the supply chain can now begin accessing the £1 billion of UK loans and loan guarantees and the £1.3 billion of European Investment Bank (EIB) funding announced on 27 January 2009. However, eligibility criteria and access routes are still to be clarified.


“Immediate clarity is needed on all available funding schemes to ensure the support reaches those who need it as a matter of urgency,” concluded Mr Everitt.


Scrappage incentive schemes currently operating across Europe:




Boost to market


Over 13 years old 

€1,500 to purchase a new car with Euro 4 as minimum engine specification.

e 30,000


Over ten years old

€1,000-2,000 to purchase a new car which is less than 160 g/km or an LCV.



Over nine years old

€2,500 to purchase a car up to 12 months old with Euro 4 as minimum engine specification. 



No age limit

€400-800 to scrap vehicle plus €1,500-3,400 if purchase a new vehicle.

e 20,000


More than ten years old

€1,500 to purchase a car which is at least Euro 4 engine specification and emits less than 140g/km for petrol and 130 g/km for diesel.



More than ten years old

€1,000-1,250 for a car which emits less than 140 g/km.

e 20,000


Over ten years old

€1,000 to purchase a car.



Over ten years old or 250,000 km

Up to €10,000 0% loan to purchase a new car or LCV. The car must cost less than €30,000 and emit less than 140 g/km. The LCV must emit less than 160 g/km.

e 100,000


Why is the automotive sector important to the UK economy?

·         27 car and CV manufacturers operating in the UK

·         1.75m cars and commercial vehicles produced each year

·         £51b turnover

·         £9.5 billion value added

·         Over 800,000 UK jobs

·         UK automotive manufacturing supplies over 100 markets worldwide offering some resilience to the UK issues

·         New cars emit less CO2 than older models – the average new car CO2 emissions have fallen 13% in the last decade


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