Renault Will Keep the French Scrappage Incentive Intact

Auto sales in 2010 could be a lot worse than in 2009, as most of the sales from last year were supported by scrappage incentives. A decision from different governments to stop offering the scrappage incentive could do serious damage to sales.

Renault decided to take matters in their own hands and announced that they will keep the 1,000 Euro scrappage subsidy. The French government decided to cut down the scrappage incentive by 30 percent, from 1,000 Euros per car to only 700 Euros per car.

Renault will add 300 Euros from their own pockets to each buyer using the scrappage incentive, the company's senior vice president for France, Bernard Cambier, told BFM radio.

He also added that Renault and Dacia are expecting sales growth of more than 90 percent in December, despite the fact that the French market only grew by 45 percent. Overall, Renault had a sales growth of 14 percent in 2009, compared with 10.5 percent growth of the overall market.

"This means that we have virtually gained one percentage point in market share in terms of cars for personal use," said Renault's senior vice president for France, Bernard Cambier.

The scrappage incentive was launched last year by the French government and had the purpose of convincing people to trade in their old cars and buy newer, greener models. Despite the recession, last year’s car sales growth in France was the biggest jump year-on-year since 1990.