The UK government is currently studying implementing a car scrapping scheme to boost new car sales but things don’t look too good at the moment as a spokesperson for PM Gordon Brown said despite it being an interesting idea, they are not entirely convinced it would be a stimulus for demand.

Car sales in the UK have dropped by about 30% year on year in January 2009 so the Society of Motor Manufacturers and Traders (SMMT) have been calling for the UK to implement a similiar policy to what the Germans did recently, which reportedly has been successful in an upturn in business for German car dealers.

What is being studies is a possible £2000 for owners of older cars to scrap their cars, especially those that are over 10 years old. The German government’s plan is similiar but the sum is £2100 and age over 9 years old. Spain has a scheme that offers scrappers a £10,000 interest-free loan. France’s scheme which started in December 2008 offers 1,000 Euros for anyone who scraps their car over 10 years old and replaces it with a car with CO2 emissions of less than 160g/km.

Austria’s scheme is for cars over 13 years old for 1,500 Euros. For Greece, there is no age limit and the scheme offers between 400 to 800 Euros to scrap and 1500 to 3400 Euros if you scrap and buy a new car. The Italians offer 1,500 Euros for cars over 10 years old with emissions of less than 140g/km, similiar to Portugal except Portugal only offers between 1,000 to 1,250 Euros. Italians who scrap and buy a CNG, LPG of hydrogen fuel cell car get 3,000 Euros.

Other European countries that don’t already have a scheme in place are also like the UK considering it. The Czech Republic (current president of the European Union) is calling for an Europe-wide scrapping program.

If the Malaysian total industry volume continues to dip (down 12.4% this year) and many GLCs involved in the auto industry here, we may see the new Najib regime revisit the car scrapping idea that the Badawi administration seems to have been quiet about. However it MUST be an opt-in thing as you cannot punish the rakyat who cannot afford to buy a new car and have to hold on to their old ones for the sake of enriching car manufacturers.