motorindustryfacts.com

Fiction: Ministers launched the car scrappage scheme to rescue the British motor industry, yet relatively little is going to UK manufacturing.

Fact: UK automotive is a globally competitive industry and will be one of the key drivers of economic growth in the future.

The extension of the UK scrappage incentive scheme is good news for the 800,000 workers directly employed by the motor industry and the thousands more whose livelihoods depend upon it. It also sends a clear signal about the strategic intent and commitment of government to sustaining one of the UK’s most important manufacturing sectors. Read more.. »

Fiction: The scrappage scheme has nearly run out of funds.

Fact: The original scheme could have run out of funds by October, but government recently announced an extension to the scrappage scheme.

The scheme will now cover up to 400,000 vehicles. Eligibility criteria will remain the same with the exception of the date of first UK registration which will be changed to 29 February 2000, or before, for cars and 28 February 2002, or before, for vans. These changes will come into effect once formal agreement has been reached with vehicle manufacturers. Read more.. »

Fiction: The UK scheme doesn’t prevent motorists part-exchanging an old small model for a brand new gas guzzler. There are no environmental benefits.

Fact: While there are no limits on CO2 emissions for the vehicle bought, evidence shows that motorists will choose a vehicle at the cheaper, lower emitting end of the market.

Motorists may choose any model from participating manufacturers in the scheme as government stipulates that each participating manufacturer must apply the scheme to its full range. However, evidence from other European countries shows that those taking advantage of the scrappage scheme tend to buy towards the less expensive end of the market, generally meaning smaller and more fuel efficient cars. Additionally, various participating manufacturers have included extra incentives on smaller vehicles to encourage consumers. Read more.. »

Fiction: The scrappage scheme isn’t going to go ahead on 18 May 2009

Fact: The scheme will start on 18 May but some manufacturers are awaiting clarification on a VAT issue

 Industry is currently seeking clarity from BERR regarding the treatment of VAT on new vehicles being sold through the scrappage incentive scheme. While vehicle manufacturers hope to resolve the situation and progress with the scheme at the earliest opportunity, there is likely to be a short delay with some manufacturers while the VAT issue is resolved.

Fiction: The scheme isn’t good enough and isn’t what industry had asked for.

Fact: The implementation of a scheme recognises the economic value of the motor industry and is a vital step forward in supporting the sector.

The scheme has been set and industry is determined to make it a success. The implementation of a scheme is great news for consumers and demonstrates government’s recognition of the importance of the auto sector. SMMT worked hard to get the best possible deal for industry and consumers and it is important to recognise that we have a good result. In the current financial circumstances this is a significant contribution from government and more importantly it will provide a major boost to consumers and could potentially boost the market by 15-20%.

Fiction: The scheme won’t have an environmental impact as it isn’t related to CO2.

Fact: Air quality and CO2 emissions have fallen dramatically in the last ten years which will lead to an environmental benefit.

 It’s important that we have as simple a scheme as possible to ensure maximum effect. There is already an existing tax regime that guides consumer choice towards lower emitting vehicles and has had a proven impact over recent years. In addition, evidence from other countries already operating scrappage schemes shows that those taking part in the scheme, who currently own a vehicle over ten years old, are likely to choose a new vehicle at the smaller end of the market.
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Fiction: A scrappage scheme will just benefit foreign companies as most of the cars sold in the UK are imported.

Fact: Automotive is a global business and the UK will benefit from global demand and support.

The introduction of a scrappage scheme is about boosting demand for new vehicles in order to kick-start the market. 75% of vehicles made in the UK are exported, generating significant revenue. 67% of vehicles sold in the UK are from manufacturers that also produce engines and vehicles here too.
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Fiction: A scrappage scheme won’t benefit the environment.

Fact: The average car is 14.5% cleaner than a pre-2000 model. Taking older cars off the road and replacing them with greener alternatives will reduce road transport emissions.

 In 2008, average UK new car emissions fell by their biggest ever rate. The fall of 4.2%, nearly three times the average was achieved steadily throughout 2008 as an increasing array of environmental products were launched. Although the number of cars on the road and average journey distance may have increased, emissions from road transport continue to fall.

Cars now account for just 11.5% of the country’s total CO2 emissions, largely resulting from new technology and improved fuel consumption delivered through consistent fleet renewal which scrappage incentive schemes aim to encourage. Regardless of the new model, its emissions will be considerably less than the one it is replacing.

Fiction: Building new cars produces so many emissions that it’s better for the environment to keep running an old model than it is to buy a new one.

Fact: Only 10% of a car’s life-time CO2 emissions come from producing it. 85% are generated through use and 5% from recycling it at the end of its life.

The motor industry has been working to cut the environmental impact of its products across their entire lifecycle. The energy needed to produce each vehicle is down 12%, water use is down 9% and waste to landfill is down 25%, compared to the previous year. CO2 emissions per vehicle produced have fallen 14% in the last year and by 45% since 1999 plus, almost 10,000 tonnes of waste have been prevented from entering landfill sites.

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Fiction: A scrappage scheme will cost the taxpayer £530 million.

Fact: Increased revenues from VAT will offset much of the cost of the scheme.

The scheme is expected to have a cost associated, but the VAT revenue from new car sales and tax-take from VED will largely off-set the incentive. The newer vehicles will deliver significant cuts in emissions, CO2 and other tailpipe emissions as well as ensuring that safer vehicles are on the roads, helping to cut accident rates.