Scrappage scheme exit system set in motion

15 January 2010 #SMMT News

Government announced today it is to introduce a quota system to motor manufacturers for the remainder of the car scrappage scheme fund.

The Scrappage Incentive Scheme, launched in May 2009 allowed for up to 400,000 motorists to claim £2,000 off the cost of a new car or van when scrapping a vehicle over 10 years old and was extended in September. With the scheme due to close at the end of February 2010, the Department for Business, Innovation and Skills has announced that it will allocate order quotas to manufacturers, based on brand popularity, to help ensure a managed exit from the scheme.
In the announcement, business secretary Lord Mandelson said, “I’m pleased to see that the scheme has been taken up by so many people, supporting our automotive manufacturers through a very difficult time. With limited orders as we near the close of scrappage there is a risk of disappointment for car buyers. I would urge people who are still keen on taking part to put their orders in as soon as possible as time is running out.”
SMMT welcomed the quota system. Chief executive Paul Everitt said, “The scrappage incentive scheme has proved hugely successful and the positive impact it has had on the new car market is clear.  The quota system will ensure an orderly end to the scheme with buyers and manufacturers both having a clear understanding of available funding. With more than 80,000 vehicles still available, we urge those thinking of taking advantage of the scheme to place their order sooner rather than later.”
The latest scrappage registration figures released this week by SMMT show that over 20% of registrations in the last six months of 2009 are attributed to scrappage. In addition to positively impacting the UK economy, the scrappage scheme has put cleaner, safer and more fuel-efficient vehicles on the road. New cars registered through the scheme had an average CO2 value of 133.3g/km. This was 9.8% below the 147.8g/km average of all new cars registered between May and December, and 26.9% below the average CO2 of the scrapped car.
Recognised as a great success, having supported UK manufacturing and jobs through a tough period for industry, the scrappage scheme’s impact is set to continue through the first and into the second quarter of the year. The implementation of the quota system will ensure a smooth closing of the scheme.

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