The final phase of the Government's scrappage scheme has begun.

Under the final stages of the scrappage scheme manufacturers have been apportioned 55,000 potential order quotas to aid an orderly close down of the scheme by giving manufacturers certainty as to how many potential scrappage orders are available to them.

The quota system will be based on retail market share which will favour manufacturers with the highest volume of total sales, rather than the highest volume of scrappage scheme sales.

Paul Williams, chairman of the RMI said: "The scrappage scheme has been a boost to the motor retail industry and has retained employment in the sector by providing in excess of 300,000 incremental sales.

"With VAT at 17.5% the scheme remains an income stream for the Treasury. Should we slip back into recession, this is perhaps something the Government might give due consideration to."

Lord Mandelson

"This is last orders for the scrappage scheme," said Lord Mandelson, business secretary.

"Industry figures have showed again and again the benefits that the scrappage scheme is continuing to deliver to the automotive sector and beyond.

"It is great news that in January scrappage helped the industry to achieve its biggest output gain since May 1976."

The UK scheme, with up to £400m from Government and matched funding from manufacturers, is intended to provide a short term boost to industry and drive consumer demand during the downturn.

Scrappage exit phase - What you need to know

1. When will the exit phase end? The exit phase will end when the budget for the Government's scrappage scheme runs out or at midnight on Wednesday, 31st March 2010, whichever is the sooner.
2. How will the quota system work? Each participating manufacturer will be given an allocation of remaining potential orders based on consumer demand. This will give manufacturers and consumers certainty as to how many potential scrappage orders are available to them. For information on quota availability at the manufacturer of your car of choice you can contact your local dealer.
3. What brands are included? 37 manufacturers have signed up to take part in the final phase of the Government scrappage scheme: Allied Vehicles, Bentley, BMW, Chevrolet, Chrysler, Citroen, Daihatsu, FIAT, Ford, Honda, Hyundai, Isuzu, Iveco Ltd, Jaguar, Kia, Land Rover, London Taxis International, Mazda, Mercedes Benz, MG Motor, Mitsubishi, Nissan, Perodua, Peugeot, Porsche, Proton, Renault, Renault Trucks UK Ltd, SAAB, SECMA UK, SsangYong, Subaru, Suzuki, Toyota, Vauxhall, Volkswagen and Volvo. The scheme applies to commercial vans (up to 3.5 tonnes) as well as cars.
4. Order taking - In this final stage of the scheme there are strict order limits on manufacturers. There will be a small further allocation towards the end of the scheme for those manufacturers that have proved particularly popular with consumers. Dealer should be keeping a waiting list for these.
5. Will it be extended again? This Government scrappage scheme will not be extended. However a number of manufacturers have already announced they plan to offer good deals to customers which will continue beyond the scrappage scheme

Paul Williams, chairman of the Retail Motor Industry Federation, said: "The scrappage scheme has been a boost to the motor retail industry and has retained employment in the sector by providing in excess of 300,000 incremental sales.

"With VAT at 17.5% the scheme remains an income stream for the Treasury.

"Should we slip back into recession, this is perhaps something the Government might give due consideration to."
 

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