The UK gets its own scrappage scheme on Monday. The big question is: will it work?
If you look at the figures published today by the European Automobile Manufacturers' Association (ACEA), you might well conclude that it will. The only countries in the EU15 and European Free Trade Association (EFTA) to post a year-on-year rise in new car sales in April were Germany and Austria, both of which have scrappage schemes.
Italy and France also bettered the EU-wide 12 per cent downward trend, their markets only shrinking by 7.5 per cent and 7.1 per cent respectively. So scrappage must be helping these markets recover, right? Seems like a reasonable assumption.
But Spain, Portugal and Romania’s results muddy matters. These countries have all introduced scrappage schemes, but Spain’s sales are down 45.6 per cent, Portugal’s figures have dropped by 33.9 per cent, and Romania has shed 51.4 per cent of its monthly sales.
Of course, there are countless other social and economic factors driving all these figures, but even so, they do call the viability of trade-in incentive schemes into question.
Then there’s the very real possibility that scrappage schemes simply compress existing demand, leaving the risk of a bust after the initial sales boom and the scrappage incentives have run out, but only time will tell on that one.
So will scrappage work in the UK? You’d have to say that the jury is out.