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PSA Group confirms Government talks over car scrappage scheme

PSA Group's UK managing director, Alison Jones

The PSA Group is in talks with the UK Government about the possibility of car scrappage scheme incentives to boost the automotive retail sector in the wake of the COVID-19 coronavirus crisis.

While Alison Jones, managing director of Peugeot, Citroën and DS Automobiles in the UK, told BBC Newsnight that, while she did not expect demand among car buyers to “come back” until Q4, a CO2 emission-based scrappage scheme was being discussed.

Speaking to the BBC’s Newsnight programme, Jones, who said told AM that she was planning for a 96% decline in sales during lockdown within days of the March 24 start of lockdown, said that the incentive scheme discussed would see costs equally shared between the industry and government.

But she acknowledged that the current crisis presented many variables to any potential recovery strategy.

Jones said: “In reality, with all the variables going on in the economic environment, we do not expect to see come back until Q4, Q1 of next year.

“We have to be realistic about the variables and what is happening out there in the economy.”

Earlier this month the ICDP’s ‘clean cars for a post-COVID recovery’ report called for the introduction of an OEM-backed CO2 emissions-reducing car scrappage scheme.

It said that such an incentive was needed in order to avoid a perfect storm of stalled sales and soaring fines from stringent new EU regulations driving carmakers ‘to the edge’.

The report said: “Without intervention in the market a recovery is likely to be protracted and this will lead to business failures amongst dealers, and potentially with manufacturers.”

Jones’ PSA Group colleague, Vauxhall managing director Stephen Norman, told BBC Newsnight that he was keen to get car retail back up and running.

Updated Government guidance published in its 50-page ‘COVID-19 Recovery Strategy’ document earlier this week indicated that car dealerships' showrooms are unlikely to be allowed to open before June 1, when other “non-essential retail” business may be allowed to open their doors.

That date is dependent on a controlled COVID-19 infection rate across the UK, however.

Speaking from the Luton LCV manufacturing facility, which re-started production this week, Norman said: “The key factor in the ramp-up (of the automotive sector) is the ability of car dealerships to re-open to customers so that we can take new orders to support the production that we make here.”

The PSA Group-owned AM100 car retail group, Robins & Day, announced yesterday that its entire UK network of 45 dealership businesses would be open by the end of this week.

Guidance from the Department for Business, Energy & Industrial Strategy (BEIS), published on the gov.uk website this week, revealed that car retailers are now free to complete click and collect vehicle sales from their dealership sites – as long as customers do not enter showrooms.

This news follows the National Franchised Dealers Association’s (NFDA) reassurance that home deliveries remain “acceptable” during the coronavirus lockdown period.

Yesterday the NFDA published a car sales best practice guide, developed in association with the Society of Motor Manufacturers and Traders (SMMT) drawing on the latest advice on COVID-19 coronavirus lockdown retail operations from Government and BEIS.

Click here to download a copy of the guide.

Click here for manufacturer best practice and procurement insight

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