In August, BMW launched its “lower emissions allowance” scheme: a cashback deal allowing new buyers to slice £2,000 off one of their new models in return for an old car to be scrapped.
Ford quickly doubled up on that, and began offering up to £4,950 on their top range. Other manufacturers followed suit, announcing their own incentive offers in rapid fire. The list of carmakers providing scrappage schemes now spans the whole market, from giants like Peugeot and Volkswagen to relatively minor players in the UK like Suzuki and Mazda.
That car manufacturers should all suddenly take it upon themselves to rid the roads of polluting vehicles could be taken as a way of publicly atoning for emission scandals, or of bowing down to government’s and cities’ increasingly stringent clean air initiatives. But there’s more to the move than an apologetic display of corporate responsibility.
Political happenings like Dieselgate and the government’s 2040 ban on non-clean vehicles have certainly affected decision-making. Nevertheless, selling as many cars as possible remains carmakers’ main motivator for launching scrappage schemes.
“I don’t think this is driven specifically by the changes that are coming into effect in 2040. My view is that this is a marketing initiative [first and foremost],” said James Dower, senior editor of cap hpi’s Black Book.
He reckoned manufacturers have partly decided to start cleaning up roads themselves without waiting for state-backed initiatives. But most importantly, they realise that the clean air issue “strikes a chord with the public at the moment, and it does look like it will be a good draw for customers, [one they can] take advantage of”.
In June, research by IAM Roadsmart found that 64% of UK drivers would support a nationwide scrappage scheme, specifically for vehicles over eight years old. Both the industry and consumers had expectations for a government-backed scheme of the kind seen in 2009-10. At the time, the initiative “helped kick-start car sales [after the recession] and also boosted the economy,” said Louise Wallis, head of business management at the National Finance and Dealers Association.
But when no such announcement came from Downing Street, manufacturers took their cue, and tailored their schemes to target pre-2010 vehicles below the Euro 5 standard. They found a way of addressing public concerns and sensibilities while at the same time fulfilling their main purpose as companies: growing the volume of sales through headline-grabbing offers.
“Scrappage schemes have been discussed at a political level since pretty much the start of the current ‘anti-diesel’ debate,” said Jayson Whittington, chief car editor for Glass’s Guide. “With new car sales under pressure across Europe, manufacturers have seen this as an opportunity to promote sales at, to be realistic, little additional cost to themselves over the usual budgeted discounts. It just gets wrapped up and presented in different ways from a marketing perspective.
The plethora of schemes seems to have piqued potential buyers’ interest. Car portal carwow has been compiling guides for all schemes on the market, and has monitored user visits after each new launch. The guides to Volkswagen’s and Ford’s deals registered a jump in traffic of more than 70% in the week after the respective announcements.
Nevertheless, manufacturers should keep their expectations realistic: earlier this month, carwow also found that half of British drivers wouldn’t trade in their car for less than £3,000 in incentives. Considering that virtually every scheme’s incentives start at £2,000, carmakers will do well to tune their marketing accordingly.