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Renault calls for reintroduction of scrappage scheme across Europe

Renault chief operating officer Carlos Tavares has called on European governments to reintroduce scrappage schemes or “other market subsidies” to boost car demand.

Tavares told Reuters he would like to see support for the European and French automotive markets.
Several dealers have also told AM they would like to see the scrappage scheme reintroduced as they describe it as “cost neutral” due to the VAT the Government makes back on the scheme.

Dealers sold over 330,000 units under the scrappage scheme in the UK which started in April 2009 and offered a £2,000 discount (£1,000 from manufacturers and £1,000 from the Government) on a new car.
Research from Glass’s at the time showed that the vast majority of scrappage scheme sales were not the “pull forward’ sales many in the industry had feared.

According to the research, more than 90% of new cars bought under the scheme were sold to customers who would not otherwise have bought a new car.

Fewer than 10% of customers who bought under the Government-backed scrappage scheme said they planned to buy a new car in future years.

Do you think a scrappage scheme should be reintroduced in the UK? Leave a comment with your opinion on this story in the box below.

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  • racer47 - 14/06/2012 16:57

    Maybe the Manufacturers would be better off if they stopped overproducing cars .. . . Scrappage is not an enviromentaly friendly solution, as the Carbon footprint made by shipping raw materials around the world, producing the power to run the factories and then shipping the finished product around the worls by far outweighs the CO2 produced by older cars. Renault has a massive issue with their product, they have failed consistantly in the Company Car sectors and despite creating the niche have failed spectacularly in the people carrier sector. The cost of franchise is expensive and their network is poor with dismal profitability and customer satisfaction hence the slashing of the range and dealer network. If they along with Peugeot and Citroen stopped designing product aimed at the French market and oozing with gallic styling, or dismally bland vehicles and then expecting everyone else in Europe to accept the product they might actually get somehwere. A lot of Nissan's design and technical work is UK based, so why as an alliance partner can Renault not see the benefit of using the same teams and designing product specifically for a nation of car lovers . . . A scrappage scheme is just a sticking plaster, do some robust root cause analysis and you'll realise that the solution is to focus on emerging markets and capitalise on opportunity, instead of their bsuinesses being subsidised further!

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  • kevthebass - 15/06/2012 11:43

    I agree with racer47, there is overcapacity in the car industry and europe is a saturated market. Not sure a scrappage scheme would work so well again, finance is much harder to come by, especially for those trading up from a "scrapper". Renault's problems are down to years of poor quality products and a loss of design direction. The buying public will no longer put up with poor quality cars, and they don't need to. The Japanese and German manufacturers, and I include Seat and Skoda in that, produce better made and arguably more stylish cars. Renault have undoubtedly improved their product quality, but far too late, plus styling wise they have lost the plot. The Renault dealer network in the UK is almost universally awful. Even the loyal French are deserting the brand.

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Renault (UK)

Renault's recovery continues with 44% growth in 2014 taking the brand to just over 66,000 units.

Market share of 2.7% takes it over the halfway point to its target of 5% share and it is yet to turn its full focus onto the fleet market, which will drive more sales.

The company insists that everything starts with introducing good quality vehicles backed by a network that offers good service, while avoiding the supermarket approach of offering an unsustainable array of models just to cover all consumer bases.

The new Kadjar crossover is the latest stage in its recovery plan, offering a Qashqai-inspired model that it is hoped will mimic Nissan's sales success.

Future announcements include a potential return of the Laguna, which fell victim to the recession-inspired cut-backs that Renault hopes to consign to history.

It's currently not destined for UK shores, but Renault hasn't ruled out its return in the long-term.

Note: Manufacturers administer the franchised contracts for cars and LCVs in different ways. Broadly, for some the contract to sell cars and LCVs is managed through a separate dealer contract. For others one contract covers both vehicle types.

AMi seeks to acknowledge the difference and reflect it in the count of each dealer groups total franchised outlets (franchised businesses) and sites (locations).

Renault administers car and LCV sales under a single contract.

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