I’ve just received a very strongly argued letter from Brian Spratt, chief executive of the Automotive Distribution Federation, concerning proposals for a scrappage scheme in the UK.
Spratt says the members of the ADF are ‘currently urging the government to firmly reject such a scheme’ and lines up some very interesting evidence.
Spratt says that, under a scrappage scheme, the ‘cost of each tonne of ‘avoided Co2’ will cost ‘£2525 and take 4.9 years to achieve’.
He compares this with investing in Geothermal energy at £3.50 per tonne avoided and £9 for nuclear power. (I should say that Mr Spratt provides serious references for these claims).
He also quotes the journal Transportation Research which claims that because ’15-20%’ of a car’s lifetime emissions are produced during manufacture, the ‘optimal age for a car is 19 years’.
He also makes the point, repeated by many others, that a scrappage scheme is likely to benefit smaller, cheaper, cars which would effectively mean channeling UK taxpayer’s money into ‘foreign factories’.
It’s also pretty chilling to see the quote from a European Union Official who suggested that while global new car capacity is about 93 million units per year, demand was probably only running at 60 million units.
It’s a very strong illustration that the troubles of the global car industry are as much to do with huge over-capacity as the global recession.
The ADF is the ‘UK trade association representing manufacturers, importers and independent wholesalers of vehicle parts, accessories and consumables.’
So we might expect the ADF to argue for ‘encouraging motorists to maintain their cars properly, minimizing environmental harm.’
Spratt also says that of the 800,000 people employed in the UK car industry, ‘600,000 are in the sector that maintains vehicles already on the road.’
A wholesale clear out of older cars – many sent early to the scrapper - would undoubtedly impact on the ADF and its members. And Brian Spratt’s logic is impeccable.
However, Autocar blogger ‘theonlydt’ makes a very good opposing point on James Ruppert’s blog below.
‘My current car is going to be scrapped, which is a shame, but £2k towards a new car is just what I need. I'm in my 20s, have a secure job and a reasonably income. My last two cars have been used cars, but I'm fed up of the servicing and repair bills associated with them.’
I suspect we could kick the scrappage argument backwards and forwards for months. But the Budget is on Wednesday, which will – rightly or wrongly - settle things once and for all.
However, with a record number of people pretty safely employed in the public sector providing a serious base of potential scrappers, my guess is that scrappage will both go ahead and prove immensely popular.