UK may join European car-scrapping frenzy

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.

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • _Zephyre_ (Member) on Feb 09, 2009 at 8:42 pm

    What, and risk supplying the rakyat with enough moolah to get a car from a non-national marque!

    Blasphemy!

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  • painsama (Member) on Feb 09, 2009 at 9:14 pm

    I won’t scrap my classic car

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  • YYC (Member) on Feb 09, 2009 at 9:26 pm

    Definitely no with the current tax rates on new cars.

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  • Poot Poot Chia (Member) on Feb 09, 2009 at 9:27 pm

    Proton Edar came out with similar idea last year. But not sure whether it is still valid now.

    http://www.proton-edar.com.my/index.php?page=campaign&action=view&id=46

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  • maibatsu_thunder (Member) on Feb 09, 2009 at 10:07 pm

    They can pry my classics out of my cold dead fingers.

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  • food_fan (Member) on Feb 09, 2009 at 10:11 pm

    If Malaysia G interested in enforce this same method, the G should consider remove the 300% import duty and other duty so call duty that can be named to 3times the price of the car..

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  • D (Member) on Feb 09, 2009 at 10:57 pm

    swt…. scrapped classical cars that has better quality than most cars.. for example our national cars… I still like my dads old Volks Beetle still looks and sounds good.

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  • bien335 (Member) on Feb 09, 2009 at 11:00 pm

    Who ever said about scrapping your classics?

    It’s more about scrapping the value-less 10 year-old Wiras and from the money, buy a Honda Cub.

    If I cant sell my crappy Wira for a decent value, I’d rather scrap the piece of shiet and get some money back from it. Not all is lost.

    Seriously though, we’d have junk yards the size of KLIA if the scrapping idea was to be put into effect.

    I’d have fun raiding these j-yards too. Cheap parts.

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  • PTAllTheBest (Member) on Feb 09, 2009 at 11:00 pm

    are our country implying such rule as car less than x amount of carbon emission? if so i failed to find it on perodua/proton website which currently the company that have the cheapest on sale in this country today…
    so next scrap our old car and offer up to rm5000 to buy another saga/viva which easily cost around rm30k. so let say loan for 9 yrs and then scrap it and buy again? that would be an non-stop car loan repayment practise…

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  • e-nabilll (Member) on Feb 09, 2009 at 11:45 pm

    thr are alot of old cars in the uk , alot of 90s

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  • MisterBenjo (Member) on Feb 10, 2009 at 1:08 am

    Sorry out of topic..i heard a rumour Neo CPS will launch this friday at 2.30PM at APEC Subang.

    Paul Tan says: Yes, stay tuned for an update.

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  • dodgeviper88 (Member) on Feb 10, 2009 at 3:18 am

    LIke someone suggested earlier, why don’t we have vehicles which are tax free for the whole of 2009? If you want to stimulate the economy this is a sure fire way of doing so.

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  • rexis (Member) on Feb 10, 2009 at 8:32 am

    It didn’t sound compulsory to scrap your car in Europe.

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  • azrai (Member) on Feb 10, 2009 at 8:36 am

    Wow, that’s equivalent to RM15,000 for each car scrapped. This is agood deal, plus the low new car price there. With Malaysia, I don’t think it gonna work. RM5k for each car which is 10 years to fully settled the loan, extra tax. This is good governance actually. I wonder where those money went to. To the ‘frogs’?

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  • BanyakMasukWorkshop (Member) on Feb 10, 2009 at 8:41 am

    maibatsu_thunder said,
    February 9, 2009 @ 10:07 pm

    They can pry my classics out of my cold dead fingers.
    ________________________________________

    they’re talking about a voluntary car scrapping policy.. more so to spur new car sales, rather than take old cars of the road.

    if only you people actually read what paul has taken the effort to write.

    also, previous car scrapping policy ideas for malaysia have revolved around a similar idea, and totally voluntary.

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  • 4G63T DSM (Member) on Feb 10, 2009 at 9:03 am

    The UK system may work as it provides just enough incentive to “trade” the car back to the government.

    For example if you for 2000 quid for an old Mondeo, a new one is under 20k, and thats 10%. Perhaps it makes even more sense for those trying to downgrade. Going to a supermini means that 2000 quid could be as much as 20% of the new car price, and that probably fair market value to boot.

    If I scrapped an Honda Accord here, the proposed $5000 riggit (assume for now the maximum as per arguments sake) is barely 4% of a new “basic” Accord.

    This will never fly if it was mandatory. Imagine the backlash. If Najib and gang tries to push for this as mandatory, it will be a big fat nail in BN’s coffin. No way you could penalize the poor for being, well poor to subsidize the rich.

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  • lchan (Member) on Feb 10, 2009 at 9:29 am

    enrich car manufacturers? that is fine with me. enriching the AP holders…screw that. Plus i aint going to pay rediculous taxes

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  • BanyakMasukWorkshop (Member) on Feb 10, 2009 at 9:29 am

    4G63T DSM said,
    February 10, 2009 @ 9:03 am

    If I scrapped an Honda Accord here, the proposed $5000 riggit (assume for now the maximum as per arguments sake) is barely 4% of a new “basic” Accord.
    ________________________________________—

    agreed, It will be very tough to work in malaysia, considering the car prices.

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  • WilliamSmith (Member) on Feb 10, 2009 at 10:24 am

    What’s the point of announcing a policy that’s “Opt In” which it’ll never work? The same that goes for the IRB announcing a month assessment of tax return and subsequently clarify that it’s a “Opt In” as well? The very simple way to stimulate the car industries in Malaysia is to axe the customs duties. Bring the price down and many will “opt in” to upgrade. For those who’re staying with their old cars ex those classics, there’re only 2 possibilities, 1, they dont have the budget for the next new car. 2, they doesnt want to spend. So given the 2 possibilities, does a “Opt In” works for them? We arent stupid to sell, say, a Volvo 940 to a Proton Saga no matter how “affordable” the later is, right? It should be at least matched if not better in term of the comfort, driving dynamics and so on isnt it?

    Get real, BNs. You’re chunking out ideas that arent thought thoroughly. Dont agreed? Just look at your EPF reduction scheme from 11% – 8%. Who’s the ultimate winner? The public isnt as naive as before, the gen x and y era is coming faster than you all can realised. Do what’s really matters, provide the Malaysians a real affordable new cars now!!

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  • BanyakMasukWorkshop (Member) on Feb 10, 2009 at 12:24 pm

    WilliamSmith said,
    February 10, 2009 @ 10:24 am

    Do what’s really matters, provide the Malaysians a real affordable new cars now!!

    ____________________________________________________

    I find what you said as being rather strange. is that really a priority for the country? is that what really matters?

    cars are cars.. they have 4 wheels, and they take people around..

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  • rosdi (Member) on Feb 10, 2009 at 5:09 pm

    capitalist at work.

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  • kamisama-alex (Member) on Feb 10, 2009 at 5:41 pm

    Actually, they don’t need to scrap the car. Just import it to Malaysia and I am sure there will be a lot of keen buyers. Then you will see everyone driving VW, Ford, Pug, BMW and other european marques everywhere.

    Indirectly helping the government save more fuel subsidy, coz the car is still much more efficient compare to our old protons. Hahahaha …

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  • not_ah_beng (Member) on Feb 10, 2009 at 6:21 pm

    @BanyakMasukWorkshop:

    “I find what you said as being rather strange. is that really a priority for the country? is that what really matters?”
    ______________________________________________________

    Is it really a priority? I agree with you, not really.

    However, its more of a priority than some really brainless things the G do with their money lately and brings more benefits to the rakyat – and the economy, as well.

    Better than spending money on Crystal mosques, buying assemblywomen or paying ‘compensation’ to toll companies thats for sure! Oh ya and bailing out Valuecap!

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  • mystvearn (Member) on Feb 10, 2009 at 8:54 pm

    2000 pounds = RM10k+ now.

    And how much does the malaysia government want to give? I don’t think its nowhere near 5 digits. And you expect people to part with their Nissan Sunny 120Y.

    NAP should say give RM15k for old cars. Then lots of people will scrap the cars, and can use the money for whatever they want. That is what the economic stimulus plan should be

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  • topgunthang (Member) on Feb 10, 2009 at 11:04 pm

    this kind of scheme only works in first world countries where the car market is competitive. for them to buy a corolla in cash (just a price benchmark) you need to work about 3-6 months. and you have hundreds of choices. for malaysia the case is very different. its about 5-10 years to own a car outright. and there is only one choice. proton. and dont mention perodua. same old trash, different smell.

    remember…the longer the loan its exponentially more you pay.

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  • tokmoh (Member) on Feb 11, 2009 at 1:32 am

    No wonder Jeremy Clarkson recently called Mr Brown a “one-eyed Scottish idiot” (which he later apologised). If Mr Brown is not an idiot, he shud know this policy can only enrage the British ppl.

    More n more British are sleeping at sidewalks jobless, homeless, carless (duh), who srsly wants to buy a new car? Already, last yr’s car sales figure in UK is said to be lowest since the 60s IIRC…..

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  • Sex is wonderful, but it's like champagne.If you're forced to have four glasses at every meal you start to fantasize about water. (Member) on Feb 12, 2009 at 2:42 pm

    if this happened in malaysia i’d kill the gov

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