Scrappage Scheme For Ni Getting Closer?

Every week there are reports and statistics published that describe the automotive industry and every time the news is bad. For months we have been observing that the sales are declining. The situation in the new and used car market in NI is as bad as in the rest of UK.

The situation is not that bad though in some other European countries. Sales in Germany, for example, have been rising lately, with a 40% soar in March. The German government has recently announced that the scrappage scheme will be continued till the end of 2009 as its effects are more beneficial than expected, giving a boost to the used car market as well. The main idea of the scheme is to offer a discount of 2500 to each person buying a vehicle under 1 year old, on condition that a car older than 9 years would be traded in.

In the same time The Society of Motor Manufacturers and Traders in UK revealed that only 313,912 cars were registered in March which gives a 30.5% fall in sales compared to March 2008 and this information resulted in a flood of articles and commentaries encouraging the scrappage scheme. Taking this data into consideration and analyzing the German wonder, the government is discussing the idea. Still there is no official confirmation, but it is very probable that the scheme will be included in the budget that is to be announced on the 22nd April. The scrappage scheme would be similar to the German one - with a discount off new vehicle given on condition that an old used car will be traded in.

It seems profitable only for new car buyers, however it may also stir the market of used cars in NI. As it happened in Germany, those who wish to buy a new vehicle will search for a cheap used one first, to be able to apply for financial incentive. And then, those who will have a good opportunity to sell their oldie, will look for a little newer used car. Retail Motor Industry Federation has already foreseen, that this kind of business may take place and suggested that a driver applying for the incentive should prove that his ownership of an old vehicle was no shorter that 12 months.

Another question is if the Irish citizens who would wish to trade in their used cars in NI dealerships would be able to benefit from the scheme. If so, the in NI new and used car market would benefit even more than in other UK regions. The interest would be high, as similar scheme surely will not be implemented in the Republic of Ireland in the next months.

To sum up, ailing car-manufacturing and selling industry in NI and the whole UK needs help. It is not yet certain what shape it will take, however it is rather probable that a scrappage scheme will be adopted. The details should be known when the budget is announced.