Scrappage Scheme Could Increase Car Sales and Improve Environment

23rd April 2009

Chancellor Alistair Darling has announced a new car scrappage scheme for the UK in his Budget speech yesterday. This means that car and van owners whose vehicle was bought more than 10 years ago will be given £2,000 towards a brand new vehicle. The scheme will expire in March next year.

If Alistair Darling needs confirmation of the positive effect of introducing a scrappage scheme in the budget could have on the UK motor industry, he need look no further than the impact in Germany and on Hyundai in particular.

The scrappage scheme has supercharged the biggest car market in Europe whilst championing smaller, greener cars. German new car sales as a whole rose by 40% in March as a result of the scrappage scheme, lifting orders to their highest level for seventeen years.

In the first three months of their scrappage scheme Hyundai sales in Germany increased by 149 per cent, with more than 28,600 new Hyundai cars sold. No other volume brand grew as much. But their smallest and greenest model has outperformed even those figures. From January to March Hyundai Germany increased sales of the i10 by 662 per cent - the biggest increase of any model.

The i10 with a starting price of £6,895 and CO2 emissions of just 119g/km could find itself amongst the best selling cars in Britain as the initiative could see hundreds of thousands of Britons spending on new cars again.

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Scrappage Scheme Could Increase Car Sales and Improve Environment