The car industry has struggled as a direct result of the coronavirus in recent months, and many new vehicle manufacturers in the industry calling for the introduction of a scrappage scheme as the ultimate consumers incentive to purchase a new vehicle.
The Independent Automotive Aftermarket Federation (IAAF) in the UK is arguing that if introduced, it will have a significantly negative effect on public mobility and the automotive aftermarket long term, especially as most of the vehicles eligible for the scheme will still be very much roadworthy.
In 2009, a scrappage scheme removed 400,000 serviceable vehicles from the aftermarket in the UK. It says that more than 90 per cent of vehicles sold under the scheme originating from non-British factories. In 2020, the situation remains largely the same with 88 percent of cars sold in the UK during 2019 being imported.
As the UK aftermarket also employs approximately 347,000 people as opposed to 186,000 in vehicle manufacturing, employment in the independent automotive aftermarket would be damaged by a scrappage scheme and jeopardise thousands of repair businesses. This would also be detrimental to motorists and customer choice.
In Ireland, the aftermarket sector accounts for 45,000+ auto industry jobs, plus we don’t have a new car industry, so a more rounded response taking account of these and other factors, should be considered. The on-going closure of the NCT centres is also counter productive for vehicle safety, employment in the auto aftermarket and tax revenues that the State could do with at this time.
With a newer vehicle parc, there is also a risk that vehicle manufacturers could potentially gain a monopoly on access to vehicle technical condition data, raising the question of data access.
With the forthcoming block exemption legislation renewal due in 2023, IAAF is continuing to argue that the aftermarket should have the same access rights as the franchised sector, providing the workshop is equipped with appropriate tools and equipment, thus creating a level playing field for all.
Wendy Williamson, IAAF chief executive, said: “Motorists are currently under great pressure, and they should not be penalised for keeping hold of vehicles that are in good working condition and can continue to be serviced, repaired and maintained long into the future.
“Not only is this unfair to consumers, but it is putting the aftermarket at great risk, as it will result in a direct decrease in the number of vehicles entering independent garages.”
Williamson added: “Changing the habits of consumers is difficult, and if the scrappage scheme is introduced, there is no guarantee that a motorist will opt for an electric vehicle over a petrol or diesel vehicle. Perhaps a more feasible option would be to introduce a limited scheme targeted at those living closest to clean air zones as demand for electric vehicles will be higher in these areas.
She concludes: “It’s crucial that any proposals are reviewed as the economic impact of a scrappage scheme could be detrimental to the aftermarket and place an unnecessary financial burden on the consumer.”