The government will officially announce plans for a scrappage scheme in this afternoon’s budget, an industry source has told Autocar.
However, a source from a major car manufacturer with a strong UK presence has told Autocar that the government is only prepared to offer £1000 per car, with participating car companies obliged to put up another £1000 per vehicle.
The scheme has no fixed timescale, but would only support 300,000 sales. There will also be no C02-based restrictions in order to help sales of cars from carbon-heavy manufacturers – particularly Jaguar Land Rover – so any measures would have no green credentials.
Industry insiders also point out that the tight profit margins on superminis and city cars would mean that profits on these vehicles – which are increasingly significant parts of the UK’s overall car market – would be effectively non-existent if manufacturers have to underwrite the scheme to the extent that Whitehall is suggesting.