1 / Scrappage schemes in Europe (according to the EU’s economic report).
France
Established in 2008 and extended, albeit regressively, until the end of 2010, the French scrappage incentive decreased from €1,000 to €700 (£865 to £605) in January 2010 and will be lowered to €500 (£432) from July until the end of the year. It is valid for the purchase of a new vehicle that emits less than 155g in exchange for a vehicle that is older than 10 years.
According to the Ministry for Economic Recovery, around 600,000 vehicles were sold in 2009 thanks to this measure. That represents 26% of the private car market (2.2 million in total) and a cost of €600m (£518m). The great majority of the vehicles purchased in the framework of the incentive emit between 101 and 120g/km of CO2, and are small cars that are also eligible for the €700 (£605) ecological bonus. Thanks to these schemes, average CO2 vehicle emissions decreased by 4.5% in 2009 to 134g (compared to 140g in 2008 and 149g in 2007).
Benchmarks:
Amount: €1,000/£865 in 2009, €700/£605 then €500/£432 in 2010 from July
Old vehicle: > 10 years
New vehicle: Private vehicle or LCV* (160 g/km of CO2 maximum)
Duration: 2008-2010
* Light Commercial Vehicles
United Kingdom
With a £400m budget, the British scrappage scheme was launched in May 2009 and finished in March 2010. There was a sum of £2,000, half of which was financed by manufacturers, for the purchase of a new model (private vehicle or LCV), in exchange for a vehicle aged over 10 years. It allowed decreasing sales to lessen in 2009:
-6.5% compared to 2008 (almost 2 million units).
In the end, 285,000 cars, or 14% of the total market, were registered thanks to this measure. Although no CO2 threshold was imposed for new vehicles, the scheme contributed nevertheless to the reduction of emission levels. The models purchased in the framework of the scheme emitted 133.3g on average, or 10% less than new registered vehicles and 30% less than those vehicles destined for scrap.
Benchmarks:
Amount: £2,000 of which 50% is paid by manufacturers
Old vehicle: > 10 years
New vehicle: Private vehicle or LCV without CO2 limit
Duration: 05/2009 – 03/2010
Spain
The scrappage scheme that appeared in December 2008 in the framework of the Plan 2000 limited the damage in a market that was in freefall (-17.9% and
-41%, compared to 2008 and 2007). Half-financed by manufacturers, this €2,000/£1,730 incentive has already generated 125,000 registrations out of a planned total of 280,000 new vehicles by September 2010.
Its special feature: it applies to the purchase of a new vehicle costing less than €30,000/almost £26,000 and discharging less than 140g/km of CO2, or for the acquisition of a used vehicle less than 5 years old, on the condition that said vehicle emits less than 149g (or 160g for an LCV*) and that the old car’s age exceeds 15 years. Although sales increased by 20% in the first quarter of 2009, the year 2010 is not expected to be better than 2008 as the programme will be halted before the end of the year.
Benchmarks:
Amount: €2,000/£1,730, of which 50% is paid by manufacturers
Old vehicle: > 10 years
New vehicle: Private vehicle (140g maximum), used vehicle (149g maximum) or LCV (160g maximum)
Duration: 01/2010-09/2010
Netherlands
Fluctuating between €750/£648 and €1,750/£1,512 depending on the type of vehicle purchased (petrol or diesel) and the age of the vehicle recovered (13 years for petrol, 9 years for a diesel), the Dutch scrappage scheme had a tally of 60,000 new vehicles in February 2010.
Around 27% of the cars purchased in the framework of this measure are new models, the majority of which are fitted with petrol engines. The scheme should finish in June 2010. However, several large cities have planned to make supplementary subsidies available in order to avoid an excessively sudden withdrawal, and will use the same systems and conditions as the government.
Benchmarks
Amount: from €750/£648 to €1,000/£865 for a petrol model; from €750/£648 to €1,750/£1,512 for a diesel
Old vehicle: > 13 years for petrol and 9 years for a diesel
New vehicle: New private vehicle or LCV, or one younger than 8 years - diesel fitted with DPF (diesel particulate filter)
Duration: 2009-2010
Romania
In March 2009, in order to boost car sales, the Romanian government established a scrappage incentive of 3,800 RON (€915/£790) for the replacement of vehicle older than 10 years and the purchase of a new model. This programme, which represents €57m/£49m, is limited to 60,000 vehicles. At the end of 2009, some 34,000 new vehicles had been registered.
The operation has been extended into 2010, but the rules have changed, with a voucher system: a €950/£818 voucher is granted for each scrapped vehicle, 3 vouchers for the purchase of a new vehicle, or over €2,700/£2,325! These incentives can be used concurrently and it is not necessary to be the owner of the old vehicle in order to benefit from the measure.
Benchmarks:
Amount: €950/£820 (vouchers)
Old vehicle: >10 years
New vehicle: Private vehicle or LCV
Duration: 02/2009 - ?
Germany
Between January and September 2009, the German car market experienced an exhilarating period (+23.2% in 2009, compared to 2010), thanks to the scrappage incentive, one of the highest in Europe (€2,500/£2,162). In total, €5bn/£4.3bn was allocated by the German state to finance 2 million incentives.
A godsend for the country which had the oldest car fleet on the continent (over 8 years). Officially called the "'environment incentive", this measure did not have a threshold for CO2 emissions or fuel consumption. One had to get rid of an old vehicle, aged at least nine years, and replace it with a new car or one that was one year old at most.
Benchmarks:
Amount: €2,500/£2,162
Old vehicle: > 9 years
New vehicle: New private vehicle (Euro 4) or used vehicle less than 1 year old.
Duration: 01/2009 – 12/2009
Italy
Thanks to the scrappage scheme, the Italian car market remained stable in 2009 compared to 2008, with just over 2.1 million cars sold. Allocated a €1.2bn/£1bn budget, this incentive could go up to €5,000/£4,323 for the purchase of a "green" vehicle. Thus hybrid or gas (LPG and CNG) models increased by 21.6% in 2009, to the detriment of diesel models which lost between 9 and 14 points compared to the two previous years (41.8% market share).
Finally, average CO2 emissions dropped from 144g to 136g between 2008 and 2009, which is a substantial decrease of 8g in a year. After having withdrawn the scrappage scheme at the end of 2009, the Italian government decided to help out other industry sectors such as electrical goods, textiles and especially two-wheeled vehicles.
Benchmarks:
Amount: from €1,500/£1,297 to €5,000/£4,323 for private vehicles; from €2,500/£2,162 to €6,500/£5,620 for an LCV
Old vehicle: > 9 years
New vehicle: Private vehicle Euro 4 or less than 130g for a diesel, 140g for other fuels
Duration: 02/2009- 12/2009 (registrations until March 2010
2 / Scrappage schemes elsewhere in the world
United States
The "Cash for Clunkers" programme was as brief as it was intense in the United States. Allocated a $3bn budget, this scrappage scheme was exhausted in only two months, between July and August 2009.
It has to be pointed out that the incentive was up to $4,500 (€3,100) for purchasing a new car. In total, some 625,000 transactions were recorded during this period, increasing sales by 50% in certain States. As the incentive did not involve restrictions in terms of CO2, the old vehicles (over 15 years old in the majority) were not necessarily replaced by low-polluting cars.
Japan
In April 2009, the Japanese government adopted a series of measures that were aimed at relaunching its car market, among which was a 250,000-yen (€1,900/£1,640) scrappage incentive. Based on particularly strict criteria, this measure is valid for a vehicle that is more than 13 years old and for the purchase of a new model that meets new standards in terms of consumption and pollution.
A 100,000-yen (€750/£650) supplementary incentive is granted for the purchase of a hybrid vehicle or one with very low CO2 emissions. These subsidies are however cut in half in the case of "micro-cars" whose engine size is less than 0.66 litres, which already enjoy fiscal benefits.
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