The cash-for-clunkers scheme has been extended with a £100 million injection partly funded by the taxpayer.
The £300 million invested by the Government and the motor industry in the plan to crush cars up to ten years old for a £2,000 subsidy to buy a new vehicle began in May and was supposed to last until February, or when the £300 million ran out.
An extra 100,000 new cars may now be bought under the plan, which has already boosted sales by 227,750. The Society of Motor Manufacturers and Traders (SMMT) thinks that the scheme will last until February. It has been extended by moving the cut-off date for eligible cars’ registrations to February 2000. Previously, only those registered before August 31, 1999, could be scrapped for the subsidy on a new car. Times Online
Declaring that the “greatest financial crisis of modern times also requires us to rethink our growth model for Britain”, Lord Mandelson pledged:
• To invest millions of pounds of public money backing technology and industries including low carbon cars and aircraft. “No more saying: the market on its own will always sort it out,” he said.
• To make more finance available to industry. Lord Mandelson promised to “build up new public channels to deliver private funds to innovative and fast growing companies”.
• An “innovation nation”. He described science as “one of the jewels in the crown of Labour’s years in office” but said there was a need for closer links between business and universities so the good ideas don’t stop at the research lab or the library door.
Lord Mandelson reiterated that cutting public spending too severely would damage the recovery. Telegraph.co.uk
U.K. new-car registrations, a measure of sales, in August climbed 6%, the second consecutive month of growth. European new-car registrations rose 3% year-on-year in August. A generous scrappage program in Germany has ended, but France is considering extending its initiatives to cushion the blow.
Incentives were introduced by governments to help car makers and dealers weather the biggest drop in demand for new cars since World War II, while at the same time boosting consumer spending and improving their environmental records by encouraging sales of vehicles with lower CO2 emissions.
“With VAT expected to rise from the current rate of 15%, an extension to the scrappage scheme will help to soften the blow to automotive business in the U.K. and help maintain momentum across the motor industry,” said Kia Motors (UK) Ltd. Managing Director Michael Cole in a statement. “It will also keep foot fall high in dealerships across the U.K., hopefully protecting jobs and dealers.”
The U.K. car market in 2009 is expected to fall 14% to 1.83 million units and a further 5% in 2010 to 1.73 million units. Wall Street Journal
Peter Gordon, group marketing director of Charles Hurst, said: “Charles Hurst welcomes the news that the Car Scrappage Scheme is to be extended to benefit even more of Northern Ireland’s motorists.”
“It has proven popular with customers, helping boost new car sales within the province, with many existing and new Charles Hurst customers taking advantage of the £2,000 subsidy to date.”
Sales of new cars dropped sharply in 2008 as a result of the drop in demand caused by the economic downturn. However, in recent months sales have begun to improve and Lookers said in its most recent results briefing that it expected the government’s car scrappage scheme to have a positive impact this year.
The scrappage scheme, and similar programmes in other countries in Europe, has also helped stabilise business for suppliers to the major car makers A number of car part manufacturers in Northern Ireland — including Ryobi, Calcast and Montupet — have been forced to cut jobs in the last year as the recession caused a drop in demand for cars their customers were making. Belfast Telegraph
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