Ford of Europe has joined calls for the British government to introduce scrappage incentives to boost new car sales during the recession.
Fords head of European sales and marketing Ingvar Sviggum said schemes in France and Germany, which give money to consumers changing old cars for new models, have reduced the impact of the economic downturn.
I went to see five German dealers this week and there were a lot of customers coming in to take advantage of the scrappage incentives, Sviggum said on a conference call.
Most were buying new cars for the first time, he said. Many of the people I spoke to were used car buyers before.
Sviggum: I really hope we will see more of the same programs in other major markets like the UK.
In the UK, new-car sales were down 30.9 percent to 112,087 last month, according to J.D. Power Automotive Forecasting.
The British government is currently considering whether to introduce a scrappage bonus.
Sviggum said the French and German sales declines in January were less than the European average.
French new-car sales dropped 7.9 percent to 149,385 while German sales declined 14.2 percent 189,385, J.D. Power said. Western Europe sales fell on average by 25.4 percent.
In France, the government offers 1,000 euros to buyers who swap a car, which is at least 10 years old for a new model.
In Germany, consumers who swap a car at least nine years old for a new vehicle can receive 2,500 euros.
The Italian government plans to offer incentives of between 1,500 euros and 5,000 euros to buyers who exchange a car at least 10 years old for a new model.
Spain has a scrappage scheme, which offers consumers up to 10,000 euros of zero interest financing to buy a new car whose value is 30,000 euros or less.
Sviggum said Spain should simplify its scheme. The Spanish scheme is very complicated. It has to be something that dealers and consumers understand.
In 2009, Ford expects total sales for all carmakers fall to between 12.5 million and 13.5 million in 2009 in its main 19 markets, down from 16.6 million in 2008.
Sviggum scrappage incentives could slow the slump. If we can reduce the industry decline by 50 percent that would be very important, he said.