subject: Uk Scrap Page Scheme - The Impact On Used Cars In Northern Ireland [print this page] Among the industries hit severely by the global slowdown, the automotive industry is now making attempts to claw back to normalcy and is taking steps to revive demand.
The last few months have been very bad for this industry given the fact that banks and financial institutions stopped lending and consumers put off any major purchases including that of cars due to fears of job layoffs.
However with the UK Government introducing the Scrappage scheme a month back, the industry is buoyant with hopes that customers will come back and demand will pick up. This ambitious project has been targeted at individuals who want to exchange used cars that have been registered either in Great Britain or Northern Ireland and that are more than a decade old, and get new vehicles.
The main objective of this scheme, for which the Government is willing to spend more than three million pounds on, is to give a strong fillip to the ailing automotive market and induce customers to give up their used cars. They feel that this would also be of great help to the stagnant used cars market in Northern Ireland and motivate car owners to switch to better cars, which are gentle on the environment as well.
However, it is now time to review the impact of this scheme and whether it has served its purpose.
Impact on sales of new cars
The response has been quite encouraging, with more than sixty thousand enquiries from car owners who want to opt for the scheme and also take advantage of the two thousand pound cash offer. Going by this trend, it is expected that the amount set aside for this scheme by the Government will be used much sooner than expected. The initial target was about three hundred car owners, and the scheme to run up to March 2010. However, close to twenty percent of the money has already been used up in the first month alone. The maximum orders came for Hyundai, with the i10 model a great hit followed closely by Toyota and Ford. Manufacturers are pretty happy with the way things are going, and the Government too is happy that the scheme is producing the expected result.
Impact on sales of used cars
Unfortunately, the same cannot be said of the impact on the used cars market. While it is quite early to get disillusioned, the expectation is that with the increasing demand for new cars, used car sales will be hit in the short term. We need to wait and watch, though.
What about the future?
To be fair, the scheme has been a success and all pundits who were skeptical about it have been proven wrong. The initial response has been overwhelming and the momentum is expected to continue. This will be of great benefit to the automotive industry and on the overall economy, since the automotive industry does support a lot of jobs. The other positive feature is that more and more people will buy environmentally-friendly cars and contribute to a healthy atmosphere.
