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AA calls on government to boost new sales by introducing scrappage scheme

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Motoring organisation, the AA is calling for financial incentives to be given to those who voluntarily scrap older cars and replace them with new models.

The AA has written to the Treasury calling upon Government to introduce a cash incentive scheme to encourage motorists to replace old cars with new ones. The AA claims this would help reduce vehicle emissions and add a needed boost to new car sales in line with the UK Government’s own efforts announced yesterday by the business secretary, Lord Mandelson.

The organisation claim that the current Vehicle Excise Duty (VED) system gives an incentive for some motorists to hold on to pre-2001 cars particularly if they want a more powerful and bigger car. There are two flat rates of VED for pre-2001cars, one below 1,549cc and the other above. These vehicles tend to be bigger polluters and tend to be less roadworthy and less safe.

To overcome problems of the French scheme where old cars that had not been used for years were cashed in, this scheme should rely on DVLA data to show that the car is pre-1996 and has been on the road for at least the last 12 months. In subsequent years the scheme could be rolled out to pre-97, 98 etc. Average new car CO2 emissions have fallen by 13 per cent since 97, so any like for like replacement will mean significant improvement. Also the market shift towards diesel would suggest an even greater benefit.

In the proposed AA scheme a voucher against the purchase of a new car would be awarded. The motorist would take the old vehicle to the dealer and the dealer would offer the £500 discount plus any additional discount which would be increased to cover the scrap value. The AA estimates that there are approximately 4.26 million pre 1996 cars or 14% of the car parc.

The combination of dramatic falls in demand and no access to finance means that automotive businesses face significant cash flow problems. Short-term support is needed to protect vital industrial capability and longer-term to maintain a competitive market for consumers. Commenting, Edmund King, AA president, said:

“A cash incentive to get the older gross polluter cars off the road to be replaced by cleaner, greener, safer models would be a boost to sales, the environment and road safety.

“In our AA/Populus poll of 17,481 drivers 28 per cent said that they would consider taking advantage of a Government incentive scheme to scrap older cars if one was available.

“A scrappage scheme would bring back some consumer confidence to the market particularly if linked to more viable loan schemes.”

Germany already has a scrappage scheme which offers up to 2,500 euros who replace a car over nine years of age.

Although not every one agrees that a scrappage scheme would be the most beneficial to the environment.

Brian Spratt, chief executive of the Automotive Distribution Federation (ADF) said:

“it’s a misuse of taxpayers’ pounds to purchase and crush so-called ‘polluting’ vehicles, and it’s nonsense to think it will achieve the goal of boosting new car sales. For a start, low-income individuals will still not be able to afford to purchase new vehicles, let alone more fuel efficient or cleaner vehicles…..There are several observers who clearly fell the resources used to produce new cars and the consequent environmental impact exceeds the environmental damage of the cars they replace.”

To crush or not to crush, why not leave a comment with your thoughts. Is it worse for the environment to manufacturer new vehicles or to keep running old ones?

See also

Faye Sunderland, January 28, 2009
Filed under: Green credentials,Latest news

1 comment

Terry Gray

Dear Faye
As the Chairman and Founder of the worlds oldest established Recycled Auto Parts System http://www.find-a-part.com I have watched for many years various European Governments attempts to deal with “ELV’s (End of life Vehicles) with they seemingly classify, in my opinion wrongly, as “Waste or Scrap”.

Over 10 years ago I was asked to address a group of Manufacturers, Insurers, Government Officials, Motor Trade representatives and other industries caught up in forseeable effects of the Legislation born of Brussels called The End of life Directive.

This talk was given at the headquarters of The AMIMecE HQ in Birdcage Walk, London a mere stones throw from Westminster.

The prognosis that I put forward was that, if implemented incorrectly or without true knowledge or comprehension of the Motor Industry, ELV Legislation would lead to an environmental and financial catastrophe both in the UK and Worldwide.

Unfortunately I had to accept that these powerful people had only ever been exposed to the images of an Industry so often portrayed on Film and TV of “Piles of Scrap vehicles” or “Car Breakers Yards” or “Other Negative Images”

I also had to accept that they had not like myself travelled the world extensively and seen that there was a “large number of Genuine and Honest business people hidden behind this image” “The Professional Auto Recycling Industry”

AT the time there was a working Group called “CARE” “Consortium for Auto Recycling Environmentally” in which many Professional Auto Recyclers” were participating in the belief that “If they supplied the answer to ELV processing they would get Vehicles to process Environmentally”

My observations were in fact very simple.

A. If you classify an ELV as Scrap it will not end up being recycled for useable components because the public would only think of it as Scrap or waste.
B. The knock on effect (A) which would be “Public Subliminal Advertising” would undoubtedly mean fewer vehicles would end up at “Professional Auto Recyclers” to produce components.
C. The knock on effect of (B) would be a reduction in the availability of “Legitimately Recycled Auto Parts”.
D. Because however the demand for “Cheaper Parts” would not be reduced but in fact increased by a combination of effects (A,B and C) the Knock on Effect would be increased Vehicle “Component Stealing Crime)

It gives me no pleasure at all to be contacted by people now, who heard my predictions then, to say “You were spot on”

It also gives me no pleasure now to see “ELV Disposal Systems” telling their owners that they only have a piece of “Scrap” so it’s only worth sending into a “Crusher”

It gives me no pleasure to see people I have known for many years and their employees going out of business because they cannot compete with the prices of the seemingly endless supply of “Cheap Used Parts” that have not been produced by a “Licensed Authorised Treatment Auto Recycling Facility”

It gives me no pleasure to see the tens of millions of “Usable Auto Parts” that end up as “Scrap Metal” not being collected and shipped to countries who could make use of them to improve their “Way of life, reduce C02 Emissions and benefit the Global Environment”

It gives me no pleasure to know that items such as “The rear ends of Pick Ups and Trucks” if shipped to these countries “With a rear axle” would mean that other human beings would not have to walk carrying burdens that must bring tears to many other humans on this planet.

It gives me even less pleasure to be part of a supposedly progressive society that now seriously contemplating making vast sums of money available to encourage people to “Get thousands for your Scrap Car” if you buy a new one.

I would applaud the idea if I thought for one minute that manufacturers would ensure that the “Scrapped Vehicles” ended up being striped of every conceivable useable component”

I would applaud any manufacturer or Government official who contemplated spending money on the concept of using “Wheels and or tyres” as Flood Barriers, Water well lift assisters, Lagoon banks or just as wheels for the third world rather than spending massive amounts of money on alternative uses. Wheels are often quoted as the “Greatest invention of Man” “Cutting them up into little pieces” is not inventive It’s just destructive.

Human Inventiveness should know no bounds, especially as the majority of humans now accept that we are partly at fault for the state of the planet on which we live.

Part of the basic premise in the earliest discussions that led to “The End of life Vehicle Directive” was for manufacturers to develop vehicles that were more recyclable. The significant missing link, if it is that is I believe hidden in The actual EC ELV Directive aims according to the web site of “The Department for Business Enterprise and Regulatory Reform” are to reduce the amount of waste from vehicles (cars and vans) when they are finally scrapped. In particular, it includes tightened environmental standards for vehicle treatment sites, requires that last owners must be able to dispose of their vehicles free of charge from 2007 (and requires producers to pay all or a significant part of the free take-back from this date), sets rising reuse, recycling and recovery targets and restricts the use of hazardous substances in both new vehicles and replacement vehicle parts. The missing or brushed aside link is “Reuse” which must by definition mean “Re-useable Parts”
In a book written in 2002 by William McDonough and Michael Braungart called Cradle to Cradle: Remaking the Way We Make Things” it was pointed out that much of the difficulty inherent in recycling comes from the fact that most products are not designed with recycling in mind. In this book the roots of the concept of Sustainable design, now commonly referred to as “green design”, “eco-design”, or “design for environment” is the art of designing physical objects, the built environment and services to comply with the principles of economic, social, and ecological sustainability.
By physical objects I would presume that “Motor Vehicles” would be included.
A quick look at a thesaurus will tell anyone that the word “Recycled” has three basic alternatives being, Second-hand, Cast-off and used. A simple drive past any “Pre-owned” vehicle sales site will undoubtedly have displays of Used and second Hand vehicles for sale.

Alternative observation might lead many people to observe that “Just as a New Car you buy from a Manufacturer is A Full set of new Auto Parts” a Used Car could be viewed factually as “A Full set of Recycled Auto Parts sold as a Used / Second Hand / Recycled Car”

This to me begs the question as to why the Government would contemplate providing Manufacturers with the type of monies being asked for to create a system of “Buy A New Car” “Scrap an Older Car” “Get a Subsidy”

My predictions for what will happen in the future if this scheme gets accepted and Funded by Governments and the taken back vehicles are just “Scrapped” are simple.

A,B,C,D will just continue to happen all over again, but this time it will be many times worse.

Whilst Governments miss the most fundamental reality that Vehicle Manufacturers are also the largest manufacturers of “Vehicle Aftermarket parts” they may also miss the reality that “It may not be in the Manufacturers best financial interests to enable more vehicles to be Recycled for Parts”

January 28, 2009

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