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The car industry has reacted with dismay at the details of the scrappage scheme announced in the Budget today.

Chancellor of the Exchequer Alistair Darling revealed that the government will give £1000 to people scrapping cars nine or more years old, if the manufacturer of the new or nearly-new car that is being bought agress to fund a further £1000 discount.

Although individual car manufacturers refused to comment about the agreement on the record, one official of a major UK brand ...Read the full article

What did they expect from a bankrupt Government with no real interest in business? As with Labour's other grand plans, this one is all hot air, and no substance.

Only 1k, and only if the manufacturer puts £1k in themselves? that's shocking - most of the sales were exoected to be on small cars where it's quite right that there is less than £1000 profit - no chance of £2k off a £6k car then. 

Interesting this - Fiat would want the scheme on it's Panda, Punto and Bravo ranges (cars you can get 3k+ off the list anyway) but not the 500.  According to the article if they signed up for the scheme to help shift those cars they'd have to do the previously undiscountable 500 too...

 

The reason I am tempted to say that it doesn't matter is that the Treasury has realised that there won't be a great benefit to UK manufacturing (as a vast number of the cars that are bought within the scheme will have been imported). The 4 billion euros the Germans are putting into their scheme will have real impact on German manufacturing - including the Tier 1s like Bosch etc. In the UK, the domestic economic benefit will likely be far, far lower...

On the other hand, the real point of the scheme - as the Haymarket/Dennis coalition kept saying, for example when a Guild member questioned them at the SMMT press conference - was to inject confidence into a struggling market.

Surely the scheme will not achieve this...