F&I Management & Training

Plans to give drivers £2,000 to trade in their old car for a new one will help to prop up foreign car plants, but do very little to protect British jobs, according to Professor Garel Rhys, of Cardiff University Business School. He has calculated that only 4% of the cars bought under any newly troduced 'scrappage' scheme would be made in Britain. Business Secretary Lord Mandelson is reported to be in advanced talks on proposals to spend up to £500 million on launching a 'scrappage' scheme that could see owners of cars at least nine years old being paid £2,000 to scrap them in favour of a new or nearly-new model. Professor Rhys says that such a move would ignore a unique feature of the British car industry: 78% of cars made in Britain are exported and 86% of cars bought in Britain are imported. He also says that the potential benefit of a 'scrappage' scheme to the British car industry was eroded further by the absence of small cheap models made here. He said: "A person who has been driving a nine-year-old car is not going to be able to afford a Jaguar, a Land Rover, or even a Toyota Avensis. We only make two cars that they are likely to buy: the Nissan Micra and the Mini, and these account for 4% of the British market. A scrappage scheme would result in the British taxpayer subsidising vehicle factories in other countries." British car dealers would benefit from the scheme, Professor Rhys said, but were likely to take advantage of the grants to reduce the discounts they were currently offering."The scheme is almost certain to push up the average retail cost of cars," he said. "If people try to say it's got anything to do with rescuing the British motor industry they either don't know what they are talking about or they are being disingenuous".

DATED: 20.03.09

FEED: AW