NFDA Calls for Scrappage Extension

The motors which drove the world automotive industry forward these past few months are running low on fuel. With funding running out for most of the scrappage incentives set in place by governments, industry players look ahead with fear and begin asking for extensions to the still running schemes.

In the UK, the National Franchised Dealers Association (NFDA) has already stepped forth and asked to meet government officials to discuss a possible extension of the countries scheme. The UK scheme is scheduled to run until March 2010, or sooner if the funds run low.

"To say the scheme has been successful since its introduction would be a mass understatement," NFDA chairman Paul Williams was quoted as saying by just-auto.com. "But with the retail economic climate still fragile and an increase in VAT scheduled for 1 January 2010, an extension of the initiative is vital."

In the beginning of August, Britain reported a total of 154,927 orders for vehicles since the debut of the scheme in April. In July, half of the 300 million pounds approved by the government were used up and concerns are raised all of the money may be gone by September.

"Further, our research tells us that, as these sales are purely incremental, the VAT earned on them has made it a self funded scheme. Indeed, if VAT were to increase government could be in receipt of a surplus."

In the UK, customers get a 2,000 pound discount when buying a new vehicle and trading-in their old one at the same time. The money is evenly split between the government and carmakers, 1,000 pounds each.