Ford’s European sales boss, Ingvar Sviggum, has joined the SMMT in calling for a government subsidy of up to £2200 for new car buyers who trade in an old car for scrap.
Read more about the SMMT's plan
Read Julian Rendell's blog on the advantages of a UK scrapping incentive
“It’s clear that a scrappage programme might work in the UK based on what we’re seeing in other European markets,” said Sviggum.
Germany’s government is paying the equivalent of £2200 to owners who trade in cars over nine years old when they buy new. This has helped to keep the decline in Germany’s new car sales to less than half that of the UK.
“A range of between £1300 and £2200 seems to be about the right level,” said Sviggum.
France and Italy are the other two major European car markets with government-funded scrappage incentives. Both offer £1300 to encourage owners of more polluting and less safe cars to trade in against a new model.
Sviggum described the UK market as “very, very depressed” compared with other European markets.
January’s new sales in the UK dropped 33 per cent, whereas Germany’s and France’s dropped 15 and 11 per cent respectively. “UK fleet sales are really down, retail are holding better,” he said.
Ford managed to increase market share in Europe by 0.5 per cent in January and sold 115,000 cars, quite a feat considering the market decline. The bald figures still say, though, that Ford sold 29,500 fewer cars than in January 2008.
Sviggum also painted a grim picture of new car sales in Europe over the next 12 months.
Ford expects total European sales to be between 12.5m and 13.5m, well behind the 18m peak of recent years.
In the longer term, Sviggum expects sales to level out at around 14.5m to 15.5m – around 2.5m fewer than the industry has experienced recently.
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