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Scrappage extension and new reg plates?

Published on: August 12, 2010

The Society of the Irish Motor Industry (SIMI) has called for an extension to the current Government scrappage scheme until early 2011. The scheme, which has been considered a success this year, has already exceeded predictions of 10,000 automobiles for the year.

Citing a boost to the industry, the conservation of jobs and the help that this scheme has been to our faltering economy, SIMI President Eddie Murphy said that there have been many winners from its introduction: "Clearly Government, the industry and consumers have all benefitted from the Scheme. However, perhaps the greatest beneficiaries have been the thousands of employees in our sector whose jobs have been secured thanks to the impact of Scrappage."

Murphy went on to add that for every one thousand jobs secured there is a net gain of €20 million for the Exchequer and that aside from the obvious boost this has the prospect of another strong year of new automobile sales in 2011 would bring about further consumer confidence. "The improvement in new automobile sales this year has had a very positive impact in terms of consumer sentiment and it would be very damaging if this were to fall back next year. An extension of Scrappage into the peak buying season in the early part of next year would be hugely beneficial," added Murphy.

Obviously, any announcement of an extension to the current scrappage scheme would have the likely effect of killing any further scrappage sales for the remainder of the year, with customers likely to hang on until January to get a new 2011 plate, but this is something that SIMI appears to be able to live with. "Effectively this would indeed kill the rest of the year, but it would be the lesser of two evils because we could be reasonably sure of a strong 2011," Murphy told changagoidem.ie.

SIMI also announced that it is seeking two changes to the registration system. The current system, which has been in place for over 23 years, has many benefits, primarily its ease of use and understanding, but SIMI believes that a revision is needed to counteract the heavy weighting of new automobile sales to the start of the year. "The issue of seasonality causes problems for a number of the key stakeholders and particularly for us in the Motor Industry. This all results in huge costs and staff pressures on businesses in the first half of the year," said Eddie Murphy.

About 54 percent of new automobiles sales occur in the first three months of the year and 76 percent occur in the first six months of the year. New automobile sales effectively end in most years mid-summer and hence there is often hesitancy for automobile manufacturers to launch new automobiles towards the end of the year. There is also a difficulty with the valuation of automobiles registered late in the year for consumers. SIMI is currently looking at a number of alternatives, modelled on other European markets.

A second change to the registration system being mooted allows consumers buying second-hand automobiles to have the option of choosing to re-register their automobile to their own county. Director General of SIMI, Alan Nolan explains. "At the moment, many motorists drive automobiles with another county's registration plate but most would prefer to drive a automobile with their own county's 'stamp' on it. We propose that automobile owners who want to do so should be able to get their registration changed to one from their county. A fee of up to €250 could be charged for this change, which the local authorities could then reinvest back into our local road network."

SIMI estimates that about 10 percent of used automobile buyers would elect to avail of this option and say that it would also help with used automobile values, as there can be prejudice against certain county plates in some areas. How easy this scheme would be to implement remains unclear and any change to the registration system would be likely to take quite some time to be passed.

Written by: Paddy Comyn


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