22 Apr 09
Margins tight on small cars
In Germany, where a similar scheme operates, new car sales rose by almost 40% over the past year. Korean car maker Hyundai, in particular, reaped the rewards with sales of its i10 supermini shooting up by an incredible 662% and its i30 sales rising by 354%.
The Government said its decision to implement the scrappage scheme had been taken after carefully considering industry proposals and taking in lessons learned from European schemes.
The Government also claims the scheme will have environmental benefits.
A statement said: 'It [the scrappage scheme] will also get older vehicles off the road and encourage consumers to invest in new, safer, and potentially more environmentally friendly models.'
However, some lobbyists say the scrappage scheme is far from 'environmentally friendly'.
'Perfectly good cars scrapped'
Yannick Read, from the Environmental Transport Association, said: 'We don't object to this initiative but to say it's a 'green' scheme is misleading.
'You've got this weird situation in Germany, where people are bringing in Mercedes with say 20k on the clock and under the rules they have to scrap it. They can take the parts, but perfectly good cars are being scrapped.
'And you can extend the argument. Why not offer grants to people who get rid of their car and decide they are going to take public transport, walk or buy a bike?
Environmental group Friends of the Earth also blasted the scheme.
FoE senior transport campaigner Tony Bosworth said: 'The plans announced in today's Budget have no green substance. This is just an unnecessary subsidy to an industry that has consistently opposed tough legislation to cut carbon emissions.
'A scrappage scheme on its own is nowhere near enough to make the emissions cuts that are needed from transport. Other measures to encourage greener cars such as larger gaps between car tax bands and investment in public transport, walking and cycling are also essential.'
Budget 2009 round-up: fuel duty rises 2p
