UK car scrappage scheme could revive demand for autos, chems

22 April 2009 16:41  [Source: ICIS news]

LONDON (ICIS news)--The UK government has launched a scrappage incentive scheme aimed at reviving the national automotives manufacturing industry, Chancellor of the Exchequer Alistair Darling said on Wednesday.

Due to start in May 2009, the scheme would see the government offer a £1,000 (€1,140, $1,470) incentive to be matched by participating vehicle manufacturers when scrapping a car or van at least 10 years old.

A similar scheme was introduced in Germany earlier this year, resulting in a 40% rise in German car sales last month, which contrasted to a slump of more than 30% in the UK market.

Petrochemical producers linked to Germany’s automotive industry, including epoxy resins, maleic anhydride and nylon manufacturers, said they had seen an increase in demand following the country’s efforts to aid the stalling sector.

The Society of Motor Manufacturers and Traders (SMMT) welcomed the scrappage incentive scheme, which was part of the UK's annual budget announcement.

“This is good news for consumers and will get people back into showrooms, kick-starting demand in the market,” said SMMT chief executive Paul Everitt in a statement.

($1 = £0.68, €1 = £0.88)

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By: Mark Watts
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