Support is growing for a Europe-wide scrappage incentive to boost new-car sales during the economic crisis.
Executives at Ford of Europe and PSA/Peugeot-Citroen said they want an expansion of the successful plans launched in Germany and France. European manufacturers association ACEA also wants a European scrappage incentive.
Our dealers in Germany are seeing significantly more activity because of the scrappage program, said John Fleming, Ford of Europe chairman.
In Germany, people who scrap cars that are at least nine years old and then buy new vehicles receive certificates worth 2,500.
The German government has put aside 1.5 billion to fund the program, enough for 600,000 payouts. The German dealers association ZDK believes scrappage incentives could add 200,000 new sales to the German car market, which was about 3 million in 2008.
There has also been a positive response in France, where the government has given a bonus of 1,000 for people scrapping 10-year-old cars.
We have seen here in France that scrapping incentives work, Peugeot Managing Director Jean-Philippe Collin said during a January results conference. We will welcome every initiative of this type at the European level.
Adding to sales volume
French carmakers have reported that scrapping incentives are adding anywhere from 15 to 30 percent to sales volumes in December and January. They expect the growth to continue.
Italy is likewise considering a scrappage incentive. In Spain, ANFAC trade association president Francisco Javier Garcia Sanz called for a new incentive for one year, similar to that in France and Germany.
Fords Fleming said a scrappage incentive would boost sales and reduce CO2 emissions by taking old and dirty vehicles off the road and replacing them with new vehicles.
But Paul Everitt, CEO of the Society of Motor Manufacturers and Traders in London, is wary of a Europe-wide scheme.
Said Everitt: We need coordinated action between EU member states, but we dont want a Europe-wide scheme, because it would take three years to debate.