THE BRITISH government is expected to follow the lead of other European countries and introduce a scrappage scheme.
The announcement, expected in next week’s budget, will encourage purchases by offering a financial incentive for drivers of older cars trading them in.
However, it is unlikely Irish motorists will be able to benefit.
Last week in his supplementary budget, Minister for Finance Brian Lenihan ignored lobbying by the Irish motor industry for a similar scheme in Ireland.
However, business minister Lord Mandelson confirmed late last year that the British government was considering the move. Discussions have been ongoing between treasury officials and the British motor industry.
Irish motorists hoping to take advantage of the scheme, which could knock as much as £2,000 (€2,240) off a new car, will be disappointed.
The SMMT, which represents the UK motor industry and led the call for a scrappage scheme, said it believes the government will not allow ageing Irish-registered cars traded in at Northern Irish dealerships to benefit.
In recent discussions with the treasury, the Retail Motor Industry Federation (RMIF) suggested any motorist trading in a vehicle must have been the registered owner for at least a year.
While officials remain tight-lipped about details, ahead of an official announcement on April 22nd, it is expected to apply to vehicles over eight years old.
Since the announcement, speculation has been growing that the government will try to kick-start sales. Since the start of the year, British dealers have sold 29 per cent fewer cars than the same period last year.
“The UK motor industry is reaching a state of emergency,” warned SMMT chief executive Paul Everitt. He said “evidence is clear that [scrappage] schemes. . . do work.”
Reports this week suggest the government is in discussions to see if a taxpayer-funded incentive could be equalled by a manufacturer discount, which would help fund the scheme.
While manufacturers are resisting such a move, they continue to stress that a scrappage scheme is essential.
“More than 800,000 jobs are dependent on the UK automotive sector,” said an SMMT spokesman.