Pressure grows on UK to introduce scrappage incentive
Up-to-date, eleven EU countries have put a fleet renewal programme in place, including market incentives and car scrapping schemes, to soften the impact of the recession, the European Automobile Manufacturers Association(ACEA) reveals. The news increases the pressure on the UK government to introduce similar schemes.
Mark Huggins, director of AA Personal Loans, says that acscrappage scheme would help kick-start the stalled motor industry, as well as help reduce CO2 emissions and improve road safety.
“A scrappage proposal ticks all the right boxes. I believe it would be a popular move and would allow many families to buy their first brand new car. But the uncertainty means some potential buyers are putting off their purchasing decisions.”
New car registrations in Germany increased by 30 per cent in February 2009 after the launch of the fleet renewal scheme. Orders increased by more than 70 per cent. As a result, total sales for 2009 could reach 3.1 million cars instead of 2.8 million as forecast initially. Roughly 20 per cent of all cars sold in France in January 2009 replaced old cars that qualified for the scrapping incentive. In Portugal, 16 per cent of all cars purchased in 2008 replaced old cars that qualified for the scrapping incentive. Fleet renewal schemes help to soften the market decline and spread it over several years. Compare these figures to the UK where new cars sales were down 30.5 per cent in March.
Trend towards CO2-related car taxation continues in 2008
The number of EU countries with CO2-related car taxation has also gone up to fifteen in 2008. With Germany set to introduce CO2-related taxation in July of 2009, all Western European countries levy passenger car taxes that are partially of totally based on the car’s carbon dioxide emissions and/or fuel consumption, completing a trend that peaked in 2007 and 2008. Romania was the first and so far only Eastern European Member State to introduce CO2-related taxation last year as part of a more comprehensive overhaul of vehicle taxation in the country.
The overview is part of the European Automobile Manufacturers’ Association Tax Guide 2009 published this week. The annual Tax Guide gives an overview of motor vehicle taxation in the twenty-seven Member States of the European Union, the countries of the European Free Trade Association as well as Turkey. In 2008, motor vehicle taxes in the EU 15 added up to €378 billion or 4.1 per cent of GDP.
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