A car scrappage scheme would “make the biggest difference” in helping the motor industry recover from the coronavirus pandemic, Ford’s UK boss has claimed.
Graham Hoare, chairman of Ford of Britain, said a VAT reduction would be “of value” but he is “really keen” for incentives that encourage people to trade in their cars for new models at the cheaper end of the market.
The automotive industry has been hit hard by the pandemic, with car production falling to its lowest level since the Second World War amid plant closures.
UK auto industry calls for dedicated restart package to save jobs and pave the way for recovery.— SMMT (@SMMT) June 23, 2020
New SMMT survey reveals a third of workforce still on furlough with up to one in six jobs at risk.https://t.co/xiOoDXZJGI #SMMTSummit pic.twitter.com/35sVZ88qpd
Speaking ahead of a summit organised by trade body the Society of Motor Manufacturers and Traders (SMMT), Dr Hoare said: “I’m really keen to find a way that we can get those those lower cost transactions happening easier.
“A scrappage programme maybe, but certainly a scheme that allows people – let’s say below £25,000 spending – to access a significant way of getting into a new vehicle.
“I think that will make the biggest difference in our industry.”
A previous initiative launched in 2009 saw motorists get £2,000 for trading in old cars for new models.
Half the money came from the Government, with the other half from manufacturers.
When we closed in March - our most important month of the year - there was obviously deliveries unfulfilled, registrations unfulfilled. We have to work through that firstMike Hawes, SMMT
SMMT chief executive Mike Hawes held back from calling for a new scrappage scheme, claiming it was important to find out what the demand was for new cars before taking action.
He said: “It will always be a bit artificial for the first few weeks… because we had that backlog.
“When we closed in March – our most important month of the year – there was obviously deliveries unfulfilled, registrations unfulfilled.
“We have to work through that first, seeing what the underlying level of demand is like, and then we’ll see where we end up.
“It may be – as we know the Treasury is considering – consumer demand and consumer confidence is low, so we would need to look at maybe cross-economy as well as sector-specific issues that relate to stimulate demand.”
The SMMT said more than 6,000 UK automotive job cuts have been announced in June so far, and a survey of its members indicated that one in six roles are at risk of redundancy.
Mr Hawes stressed the importance of the Government securing a free trade agreement with the EU as part of the Brexit negotiations.
He said: “With such a deal, a strong recovery is possible, we can safeguard the industry and our reputation as an attractive destination for foreign investment and a major trade player.”