New Governement Scheme means you could be paid £2000 to scrap your car

Aston Martin, Bently, GM (vauxhall), Honda, Jaguar Land Rover, Mini Nissan and Toyota, what do these car companies have in common? All are facing problems due to the slump in car sales. A drop in sales has led to the need to cut production, the car companies don’t want to cut thousands of jobs so measures have been brought in to prevent this.

Aston Martin had an extended shutdown at and made 600 redundancies. In January they introduced a Temporary three-day week. Bentley also introduced a three-day week. The are closing the Crewe plant for seven weeks from the beginning of March and have made 220 job cuts. GM had an extended closure at Christmas and 40-day shutdown. Honda is on a four-month shutdown between February and May
Jaguar Land Rover had a series of one-day shutdowns and production cuts in late 2008 and are planning 450 redundancies. Mini had 850 job losses, introduced a five-day week and a 2 week shut down is planned for August. Nissan had a two-week shutdown late last year , made 1,200 redundancies and have stopped some shifts. Toyota is planning new cutbacks after cutting pay and working hours by 10% some staff have been offered voluntary redundancy and one of the night shifts suspended.

As you can see, car manufacturers are doing all they can to survive the current climate. This has led to questions over what the government can do to help. Peter Mandelson is considering a proposal to introduce a German scheme into the UK.
The government in Germany has started a scheme wherby car owners are paid 2.500 euros to scrap a car over nine years old and replace it with a new model. Mandelson suggests bringing in a similar scheme to the uk where car owners scrap their nine year or older car in return for £2000 off a new energy efficient model.
The scheme is not without its critics, environmentalists label it as an expensive way to cut carbon emissions
The head of car manufacturer Daimler Mr Zetche heavily criticises the idea

"Instead of paying people to scrap their cars, we might as well burn ten-pound notes in power stations," he proclaims.”

Of course you have to question the source of this money if the scheme was introduced into the UK. While many would appreciate the cash boost, taking more money in tax to cover it would certainly be very unpopular.

Advocates for the scheme point out the advantages, the money would offset the vat on cars that may not be sold without some form of incentive, so would not actually cost the government anything. If it worked it could spark the economy back into growth. At least it would keep supply chain up and running.

Emissions is the other advantage and newer cars do produce less emission so it certainly is one way of reducing the UK carbon footprint. All cars need to be scrapped and complete an ELV, to make sure any recyclable materials are removed.

Certain car scrap dealers do this for free at the moment and a government scheme to encourage people to scrap cars can only help increase their business but whether it will work for the car industry as a whole remains to be seen. Let’s see whether Mr Mandelson decides to push this one.