Scrappage scheme to help the car industry post COVID-19?

PaulRyan97 · 10-04-2020 5:00pm #1

I figure something like this is on the cards to help out dealers here who have had their business decimated by the current crisis.

Any ideas on what form something like this could/should take? Similar to the 2009 scheme or something different entirely? VRT rebate on new cars, maybe based on how eco-friendly the car you want is?

colm_mcm · 10-04-2020 5:04pm

The distributors have plenty margin to give away if they want to make sales.

saabsaab · 10-04-2020 5:19pm

PaulRyan97 wrote: »

I figure something like this is on the cards to help out dealers here who have had their business decimated by the current crisis.

Any ideas on what form something like this could/should take? Similar to the 2009 scheme or something different entirely? VRT rebate on new cars, maybe based on how eco-friendly the car you want is?

A grant for zero emissions or non fossil fuel vehicles only could be a runner nothing for the rest. there is an argument that not producing new cars electric or ICE avoids production of greenhouse gases. Perhaps a grant to convert and refurbish older vehicles to LPG or electric also?

PaulRyan97 · 10-04-2020 5:50pm

saabsaab wrote: »

A grant for zero emissions or non fossil fuel vehicles only could be a runner nothing for the rest. there is an argument that not producing new cars electric or ICE avoids production of greenhouse gases. Perhaps a grant to convert and refurbish older vehicles to LPG or electric also?

Ideally yes you'd get the money for buying a hybrid or electric car only. The problem is some brands simply don't have a very wide range, or any range of these vehicles. I know that's the fault of the brands but the government might not want to make dealers suffer due to the choices of the brands they represent. They might allow regular petrol or diesel cars to avail of the scheme, maybe if they're under a certain emissions level and even then you get a reduced amount of money.

colm_mcm · 10-04-2020 5:52pm

We already throw too much money at electric cars.

saabsaab · 10-04-2020 6:12pm

Electrics aren't perfect by any means. Probably need a new power storage other the than current batteries to make the big change over that's needed. I don't believe in the non plug in hybrids, two engines being lugged around all the time. Government will be looking at bio or renewable options especially with the greens in government which I would say is a certainty.

Miscreant · 10-04-2020 6:24pm

Isn't there already up to €10000 in grants/VRT rebates on electric cars and something like €7500 on plug in hybrids? I don't think non plug in hybrids benefit from grants any more.
I doubt there will be anything extra from the government in this case but the dealerships/distributors might do something to try boost their sales.

Seth Brundle · 10-04-2020 7:06pm

Given the finite money available for funding schemes to assist businesses, funding one where you encourage people to spend a large amount of money where most of it leaves the country won't be high on the list IMO!

PaulRyan97 · 10-04-2020 7:38pm

Seth Brundle wrote: »

Given the finite money available for funding schemes to assist businesses, funding one where you encourage people to spend a large amount of money where most of it leaves the country won't be high on the list IMO!

Think it's jobs in Ireland we're more worried about here.

https://www.independent.ie/life/motoring/coronavirus-motoring-industry-jobs-at-risk-as-new-car-sales-nosedive-amid-crisis-39094122.html

Seth Brundle · 10-04-2020 8:09pm

PaulRyan97 wrote: »

Think it's jobs in Ireland we're more worried about here.

https://www.independent.ie/life/motoring/coronavirus-motoring-industry-jobs-at-risk-as-new-car-sales-nosedive-amid-crisis-39094122.html

I wouldn't pay much head to SIMI and to be honest their numbers in that article are a joke.
However, being realistic, how many actual jobs would a scrappage scheme help?

Isambard · 10-04-2020 8:12pm

no one will have any spare money for a few years whilst we get things sorted.

mikeecho · 10-04-2020 8:55pm

Isambard wrote: »

no one will have any spare money for a few years whilst we get things sorted.

I totally agree.

Grants for upgrading to zero or low emission cars, for houses, building projects, motorways etc etc etc.. are gone.

Increased property tax, motor tax, carbon tax, VAT, Duty.. it's all to come.

It's unavoidable.

Toyotafanboi · 10-04-2020 8:57pm

Seth Brundle wrote: »

I wouldn't pay much head to SIMI and to be honest their numbers in that article are a joke.
However, being realistic, how many actual jobs would a scrappage scheme help?

I'd say it's very difficult to put a figure on that without making up a lot of things or a fortnight's intensive research.

But it doesn't take a genius to realise that buying and selling the product will keep people in jobs. It's a bit dim witted to take the approach that when buying a car most of the money goes put of the country. Purchasing in an Irish dealer will support Irish jobs.

Not just the salesmen, the whole dealership gets something from it and the dealerships suppliers too. Mechanics to PDI the new cars, parts departments to supply mats and mud flaps, valeters to prepare the new cars, motor factors to supply number plates and disc holders tyre shine. Lorry drivers to bring in the new cars and take away the scrapers, administration staff etc.

Please God dealers will open back up in time and a few people buy cars later in the year and I can work again. I'm not saying we need government financial stimulus or handouts but local support and business is something you'd hope to have if people can afford to do so.

Del2005 · 10-04-2020 9:08pm

Toyotafanboi wrote: »

I'd say it's very difficult to put a figure on that without making up a lot of things or a fortnight's intensive research.

But it doesn't take a genius to realise that buying and selling the product will keep people in jobs. It's a bit dim witted to take the approach that when buying a car most of the money goes put of the country. Purchasing in an Irish dealer will support Irish jobs.

Not just the salesmen, the whole dealership gets something from it and the dealerships suppliers too. Mechanics to PDI the new cars, parts departments to supply mats and mud flaps, valeters to prepare the new cars, motor factors to supply number plates and disc holders tyre shine. Lorry drivers to bring in the new cars and take away the scrapers, administration staff etc.

Please God dealers will open back up in time and a few people buy cars later in the year and I can work again. I'm not saying we need government financial stimulus or handouts but local support and business is something you'd hope to have if people can afford to do so.

There's a lot of industries and services that don't send the majority of the money out of the country they should be supported before anyone else.

L-M · 10-04-2020 9:12pm

Scrappage schemes don’t work and they definitely aren’t what’s needed.

If you think about it logically, who has a 20 year old car that has the money to buy a new car? Or the interest?

Scrappage would just devalue the used cars. Who would buy a 17/18 if you could just get a big discount off a new one? And these are the people who are the ones who actually change and buy new cars, to allow the people with 12/13 to trade up a few years, to allow the 07/08s to trade up a few years, the circle continues.

Unless, and I’m not for one Second suggesting this, the government offered cheap money like the offered those 2 percent council mortgages, people won’t have the money to buy new cars.

What’s drives new car sales is a good economy and consumer confidence. so the circle of life as mentioned above can continue.

Toyotafanboi · 10-04-2020 9:22pm

Del2005 wrote: »

There's a lot of industries and services that don't send the majority of the money out of the country they should be supported before anyone else.

I dont know if the sourcing of the product is the most relevant factor pertinent to support. The industry still generates local employment for tens of thousands.

Marcusm · 10-04-2020 9:31pm

Toyotafanboi wrote: »

I'd say it's very difficult to put a figure on that without making up a lot of things or a fortnight's intensive research.

But it doesn't take a genius to realise that buying and selling the product will keep people in jobs. It's a bit dim witted to take the approach that when buying a car most of the money goes put of the country. Purchasing in an Irish dealer will support Irish jobs.

Not just the salesmen, the whole dealership gets something from it and the dealerships suppliers too. Mechanics to PDI the new cars, parts departments to supply mats and mud flaps, valeters to prepare the new cars, motor factors to supply number plates and disc holders tyre shine. Lorry drivers to bring in the new cars and take away the scrapers, administration staff etc.

Please God dealers will open back up in time and a few people buy cars later in the year and I can work again. I'm not saying we need government financial stimulus or handouts but local support and business is something you'd hope to have if people can afford to do so.

The last time around the govt was incentivised to get car sales going because VAT/VRT brought great revenue to the govt. The unemployment effects of Coronavirus are worse and more widespread. The motor industry should try and design some incentives for service, repair based activity. Government focus is going to be on job retention/creation. I would expect huge pushes for holidaying at home this summer to kickstart hotels (lots of jobs although many low pay and seasonal), eating out at restaurants etc. The money flies through the economy with a multiplier effect. Likewise with car repairs, servicing, upgrades (even modifications). Boosting car sales will boost government coffers which will be a lower priority. The government needs economic activity rather than deficit reduction.

Hopefully VAT rates on human activity in the motor industry can be reduced.

Rows Grower · 10-04-2020 9:38pm

Toyotafanboi wrote: »

I dont know if the sourcing of the product is the most relevant factor pertinent to support. The industry still generates local employment for tens of thousands.

Really, are you talking about just new car sales with that figure?

I find that hard to believe.

colm_mcm · 10-04-2020 10:13pm

I’m sure they’d rather take money into the country from abroad via exports than just try and extract it from consumers.
Scrappage schemes are not good for the industry.
What sells new cars is strong residuals on used cars.

screamer · 10-04-2020 10:17pm

No just no. An industry not worth saving. Sure you can buy any new model from any garage. The car industry is outdated, and they destroyed the car pool here last time the recession struck, exporting everything so that we all had to buy new. No, I don’t want my tax money wasted on that industry, besides I see a huge shift in working from home after this passes, and there won’t be a need for so many cars clogging up the roads.

L-M · 10-04-2020 10:19pm

screamer wrote: »

No just no. An industry not worth saving. Sure you can buy any new model from any garage. The car industry is outdated, and they destroyed the car pool here last time the recession struck, exporting everything so that we all had to buy new. No, I don’t want my tax money wasted on that industry, besides I see a huge shift in working from home after this passes, and there won’t be a need for so many cars clogging up the roads.

Your username is apt

Toyotafanboi · 10-04-2020 10:45pm

Rows Grower wrote: »

[/B]
Really, are you talking about just new car sales with that figure?

I find that hard to believe.

I mean the motor industry in general.

That said, getting a new car ready to deliver to the customer take a lot more than just a salesman. A used car even moreso.

"An industry not worth saving though". Great to see such positivity.

saabsaab · 10-04-2020 10:47pm

In the not too distant future a person who wants to use a car will pay the car company a range of fees for car transport.

Cars will be self driving and will arrive at your door from a central depot pool called up by you from your mobile as an when you need it.

You won't unless you are rich, own it but there will be a band of fees say for high use high priority, moderate use and infrequent use.
The fee will cover insurance, covered by the company, any taxes and fuel (electric?).
Private person driven cars will become far less common and insurance will be extremely expensive to run.

L-M · 10-04-2020 10:51pm

saabsaab wrote: »

In the not too distant future a person who wants to use a car will pay the car company a range of fees for car transport.

Cars will be self driving and will arrive at your door from a central depot pool called up by you from your mobile as an when you need it.

You won't unless you are rich, own it but there will be a band of fees say for high use high priority, moderate use and infrequent use.
The fee will cover insurance, covered by the company, any taxes and fuel (electric?).
Private person driven cars will become far less common and insurance will be extremely expensive to run.

I would say that’s so far away in Ireland you’re talking next generation stuff.

Rows Grower · 10-04-2020 10:55pm

Toyotafanboi wrote: »

I mean the motor industry in general.

That said, getting a new car ready to deliver to the customer take a lot more than just a salesman. A used car even moreso.

"An industry not worth saving though". Great to see such positivity.

What are you on about lad?

Dravokivich · 10-04-2020 10:59pm

I think a major issue would be availability of credit. We've seen a lot of people layed off recently and starting to see businesses shut down too. A Government backed scrappage scheme, will only benefit a small set of buyers.

John_Rambo · 10-04-2020 11:00pm

saabsaab wrote: »

In the not too distant future a person who wants to use a car will pay the car company a range of fees for car transport.

Cars will be self driving and will arrive at your door from a central depot pool called up by you from your mobile as an when you need it.

You won't unless you are rich, own it but there will be a band of fees say for high use high priority, moderate use and infrequent use.
The fee will cover insurance, covered by the company, any taxes and fuel (electric?).
Private person driven cars will become far less common and insurance will be extremely expensive to run.

L-M wrote: »

I would say that’s so far away in Ireland you’re talking next generation stuff.

Agreed. My kids or grandkids maybe, although I know a good few people that don't own cars using Gocar.

I wonder what's going to happen with PCP deals? Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?

Seth Brundle · 10-04-2020 11:00pm

Toyotafanboi wrote: »

I mean the motor industry in general.

That said, getting a new car ready to deliver to the customer take a lot more than just a salesman. A used car even moreso.

"An industry not worth saving though". Great to see such positivity.

Ireland does not have a car industry! God I hate that term!

Toyotafanboi · 10-04-2020 11:03pm

Seth Brundle wrote: »

Ireland does not have a car industry! God I hate that term!

Good job I didn't use it then.

L-M · 10-04-2020 11:11pm

John_Rambo wrote: »

Agreed. My kids or grandkids maybe, although I know a good few people that don't own cars using Gocar.

I wonder what's going to happen with PCP deals? Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?

They can’t becAuse if the customer wants to keep their car they can just get a loan from the bank etc

Also can’t because if they try screw them they won’t sell new cars.

I personally find anyone on PCP often gets a better trade in because the salesman is chases a monthly rather than a cost to change.

supervento · 10-04-2020 11:13pm

John_Rambo wrote: »

Agreed. My kids or grandkids maybe, although I know a good few people that don't own cars using Gocar.

I wonder what's going to happen with PCP deals? Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?

When you say "Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?"

How do you mean?

GMFV means exactly that, if the car is worth less then the GMFV hand the vehicle back to finance company? I am not understanding how the finance companies are screwing people ?

John_Rambo · 10-04-2020 11:21pm

supervento wrote: »

When you say "Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?"

How do you mean?

GMFV means exactly that, if the car is worth less then the GMFV hand the vehicle back to finance company? I am not understanding how the finance companies are screwing people ?

You must have thought I was accusing the finance companies of screwing people. I never said that. I was asking would they screw people. I'm happy to see that, unlike me, you've read the T&C's and the small print and are confident they won't.

I know a good few people that have high end cars on PCP that are looking at job losses and business closures. Sorry if my question wasn't clear or was misunderstood and thanks for clearing it up.

LeinsterDub · 10-04-2020 11:26pm

Doesn't motoring get enough free money? The roads in my locality have been wonderful for the past few weeks with the reduced numbers of cars

Toyotafanboi · 10-04-2020 11:34pm

Rows Grower wrote: »

What are you on about lad?

It might be easier if you just get to the point you're looking to make.

I just personally found that comment disappointing.

supervento · 10-04-2020 11:58pm

John_Rambo wrote: »

You must have thought I was accusing the finance companies of screwing people. I never said that. I was asking would they screw people. I'm happy to see that, unlike me, you've read the T&C's and the small print and are confident they won't.

I know a good few people that have high end cars on PCP that are looking at job losses and business closures. Sorry if my question wasn't clear or was misunderstood and thanks for clearing it up.

I haven't read all the T&C's and small print as I don't need to and I am probably not as informed as you.....

When you say "Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?" This question doesn't make sense....

I must have misunderstood what you are trying to say.... to clarify my understanding is the GFV is that it is set by the finance company at the start of the term taking into account the term and the mileage that the customer specifies.... (this figure cannot be changed) the finance company cannot "screw peoples GFV" it is a fixed figure which the customer agrees to when taking out the agreement...

At the end of the term if the vehicle is worth less than what the GFV is, once you have adhered to the mileage and condition requirements... hand the vehicle back....

I know in the Uk the manufacturer finance companies have already introduced emergency measures to help customers during this exceptional period we find ourselves in.... similar steps taken here too I would hope.....

I can understand what you mean about the people you know on PCP's, facing job loses or business closures who may be concerned if they are not over half way through their term or nearing the end of the term.... with regards making repayments...

John_Rambo · 11-04-2020 12:03am

supervento wrote: »

I haven't read all the T&C's and small print as I don't need to and I am probably not as informed as you.....

When you say "Are the finance companies going to screw people on the "guaranteed" minimum future value (GMFV) when we're in recession and the cars are worth far less value?" This question doesn't make sense....

I must have misunderstood what you are trying to say.... to clarify my understanding is the GFV is that it is set by the finance company at the start of the term taking into account the term and the mileage that the customer specifies.... (this figure cannot be changed) the finance company cannot "screw peoples GFV" it is a fixed figure which the customer agrees to when taking out the agreement...

At the end of the term if the vehicle is worth less than what the GFV is, once you have adhered to the mileage and condition requirements... hand the vehicle back....

I know in the Uk the manufacturer finance companies have already introduced emergency measures to help customers during this exceptional period we find ourselves in.... similar steps taken here too I would hope.....

If you clarified the point you are making, I could get a better understanding of what you are saying?

You've answered my question in the bolded sentence. Thanks so much for the other info. Very interesting.

supervento · 11-04-2020 12:12am

John_Rambo wrote: »

You've answered my question in the bolded sentence. Thanks so much for the other info. Very interesting.

No worries...

I read this article in a U.K. newspaper recently... it’s interesting...

https://www.google.co.uk/amp/s/amp.theguardian.com/business/2020/apr/08/fears-of-crisis-in-uk-car-finance-market-as-owners-seek-payments-help

brightspark · 11-04-2020 12:30am

With the exception of food retail no business is doing well currently, and even food retail probably has considerable extra costs due to the social distance restrictions and sanitising etc.

If anything SIMI should be grateful that the lockdown is during what is probably a quiet time after the new year (201) sales and before the July 202 sales.

The tourism industry is highly unlikely to see significant business this year, international travel is likely to be very much restricted for several more months.

With earnings down for many people luxuries such as a new car or even just changing up a few years will be postponed

I have a very low opinion of any lobby group looking for special treatment before we even know when the peak of the pandemic has passed, let alone know how much it has cost.

Who is going to pay for subsidies to any industry? Simple answer is the taxpayer, but the taxpayer will be too busy paying for the much needed welfare payments that most workers are currently receiving. SIMI as far as I am concerned can wait.

Rows Grower · 11-04-2020 12:52am

Toyotafanboi wrote: »

It might be easier if you just get to the point you're looking to make.

I just personally found that comment disappointing.

What are you on about lad with your personal disappointment?

I asked you a simple question about the numbers of jobs you proclaimed would be affected.

almostover · 11-04-2020 1:05am

Toyotafanboi wrote: »

I dont know if the sourcing of the product is the most relevant factor pertinent to support. The industry still generates local employment for tens of thousands.

We don't have a car industry. Not since Ford shut up shop in Cork all those years ago. We have a car sales industry. And if we're genuine about doing good for the environment we should be doing everything in our power to keep our 2nd hand fleet of cars on the road for as long as possible. There is a huge amount of carbon sunk into a car during its manufacture.

yosser hughes · 11-04-2020 1:15am

Yep, we do not have a car industry no matter how the car sales lobby describe themselves. WE don't manufacture cars so most of the money leaves the country.
They have been very successful in the past at getting concessions from government, I'm not so sure they will be going forward though.
It's about priorities after this.

An Ri rua · 11-04-2020 1:29am

saabsaab wrote: »

In the not too distant future a person who wants to use a car will pay the car company a range of fees for car transport.

Cars will be self driving and will arrive at your door from a central depot pool called up by you from your mobile as an when you need it.

You won't unless you are rich, own it but there will be a band of fees say for high use high priority, moderate use and infrequent use.
The fee will cover insurance, covered by the company, any taxes and fuel (electric?).
Private person driven cars will become far less common and insurance will be extremely expensive to run.

This future is already here. If you're under 18 but over 10 and have s mobile.

_Kaiser_ · 11-04-2020 1:35am

brightspark wrote: »

If anything SIMI should be grateful that the lockdown is during what is probably a quiet time after the new year (201) sales and before the July 202 sales.

Maybe we can get rid of that ridiculous xx1/xx2 system at the same time too.

Idiotic idea that won't be needed if no-one has money/finance to buy cars

Marcusm · 11-04-2020 8:59am

colm_mcm wrote: »

I’m sure they’d rather take money into the country from abroad via exports than just try and extract it from consumers.
Scrappage schemes are not good for the industry.
What sells new cars is strong residuals on used cars.

I can see the logic re strong residuals as it doesn’t frontload the depreciation on the first owner (too much). The U.K. has had a very strong new car environment without (what Ireland would regard as) strong RV levels. Perhaps it is societal factors there such as number plate envy, easy availability of credit etc.

colm_mcm · 11-04-2020 9:16am

Up until now though, one of the biggest factors of Irish resale values has been uk pricing, but we start higher on the new price day 1.
With uk imports being an unknown post Brexit, I can see the price of used cars firming up here, which will certainly help new sales.

That’s not taking into account the side effects of cv19 of course.

Toyotafanboi · 11-04-2020 9:19am

almostover wrote: »

We don't have a car industry. Not since Ford shut up shop in Cork all those years ago. We have a car sales industry.

That's grand and all but it's being more than a little pedantic with terminologies, I'm actually surprised how much it offends people.

When some says the irish motor industry, you know well what's being referred to. The industry in Ireland that revolves around the distribution, sale, repair and maintenance of motor vehicles.

Philb76 · 11-04-2020 10:04am

Scrappage schemes are available all the time usually at least one manufacturer offering one but they usually are for the benefit of the owner of an old worthless car but how much of the motoring public is that very low i would think so a mass scrappage scheme would be pointless anyway

Seth Brundle · 11-04-2020 10:05am

Toyotafanboi wrote: »

The industry in Ireland that revolves around the distribution, sale, repair and maintenance of motor vehicles.

So not an industry but merely a retail and support service made to sound like more than it is.

Rows Grower · 11-04-2020 10:18am

Seth Brundle wrote: »

So not an industry but merely a retail and support service made to sound like more than it is.

Careful now or he'll be personally disappointed again for some imaginary reason.

anewme · 11-04-2020 10:23am

Seth Brundle wrote: »

So not an industry but merely a retail and support service made to sound like more than it is.

You are aware that SIMI are The Society of the Irish Motor Industry?

How many jobs do you think are in the Motor Industry in Ireland?

Rows Grower · 11-04-2020 10:26am

anewme wrote: »

You are aware that SIMI are The Society of the Irish Motor Industry?

How many jobs do you think are in the Motor Industry in Ireland?

How many jobs do you think will be lost unless a scrappage scheme is introduced?

Scrappage scheme to help the car industry post COVID-19?

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