European scrappage schemes boost car sales as calls for UK equivalent are renewed
3 April 2009

Germany’s year-on-year car sales were up by 40 per cent in March, a figure boosted by the success of the German scrappage scheme.

Total sales in Germany last month were 401,000, according to figures released by the German car importer’s association VDIK.

The news from Germany comes amid renewed calls for the UK government to act quickly and bring in its own car scrappage scheme.

With some analysts predicting another sharp fall in new car sales for March, Paul Williams, chairman of the Retail Motor Industry Foundation, said: “Measures to help to revive new-car sales in the UK, including the introduction of a vehicle scrappage scheme, must be enacted as soon as possible.”

The success of the German government’s scrappage scheme, which offers buyers of cars under 12 months old a €2500 (£2285) discount if they scrap a car more than nine years old, has prompted Berlin to extend the scheme beyond the original €1.5bn (£1.37bn) it invested.

Volker Lange, head of VDIK, said: “The decision to top up funds for the bonus scheme came just in time given that the money originally approved has run out.”

March’s 40 per cent rise follows a 21.5 per cent year-on-year increase in February.

The scrappage scheme in Italy also seems to have reignited the market, as March’s year-on-year new car registrations rose by 0.24 per cent, the first monthly increase there in a year.

Italian new car orders, however, were up by more than a third to 276,000, which should lead to a large boost in new car registrations in April.

Fiat had a particularly good month in March, as new registrations across its three brands were up by 6.1 per cent to 69,882 units.

The German and Italian increases follows the news on Wednesday that French new car registrations rise 8.1 per cent to 204,095 and Spanish registrations improved on February’s figures to record a drop of 38.7 per cent.

But not all car manufacturers agree that scrappage schemes are the answer to their problems, citing the problem of future demand being compressed into the first six months of the year.

"Following the lifting of the rebate there will be a sales slump," said Mercedes boss Dieter Zetsche. "This has occured in other countries. Because of this, it is not in the best interests of the car makers."

Mark Tisshaw

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