Government extends support for ailing car manufacturers

29 September 2009

The UK Government has injected a further £100m to the vehicle scrappage scheme in a bid to bolster the country’s ailing automotive business. So far, 227,750 orders have been placed through the scheme and the increased funding, brings the budget to £400 million, enabling funding for a further 100,000 vehicles.

Industry figures have reflected the positive impacts of the scheme both within and beyond the automotive sector, with manufacturing benefiting and the whole supply chain, from plastics and steel, to individual component manufacturers.

The extension continues as a Government and manufacturer partnership, with matched funding providing the £2,000 discount for each scrappage order.

Alongside the increased funding the Government will work with manufacturers to extend the benefits to van owners with vehicles more than eight years old rather than the current ten year requirement. Car owners will also get a boost, with the age qualification changed by six months to extend the benefits to cars registered on or before February 29, 2000 (V registration). The scheme will come to an end in February 2010 or when the funding runs out, which ever is sooner.

Business Secretary Lord Mandelson said: "The sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400m.

"But we must make sure that the help we do offer is targeted, limited and proportionate. This is not a blank cheque to the auto manufacturers but recognition that there is still a short term challenge to boost demand and confidence in the sector."

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