Scrappage scheme: behind the figures

Good news and bad for the motor industry this week, with June's car registration figures showing a 15.7 per cent fall year-on-year and a year-to-date fall of 25.9 per cent. While this is not an immediate cause for popping champagne corks, it is a significant fall in the rate of decline, which had been increasing every month since last July.

The £2,000 scrappage incentive scheme is claimed to be delivering this slightly less-than-terrible news, although there are mixed messages from the industry, not least in pondering the accurate picture. Last week's report from the Society of Motor Manufacturers and Traders (SMMT) trumpeted the scheme as "successful" with 29,796 vehicles (9.7 per cent of June total registrations) registered under the scheme since it started on May 18.

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The report listed car makers' contributions, with Ford, Hyundai and Toyota big winners, each amassing more than 4,000 scrappage sales.

Car makers have disputed the figures, however, claiming they are gross underestimates. Volkswagen, for example, is credited in the report with 356 scrappage registrations, yet it claims to have registered 1,912 cars and have orders for a further 4,836.

This is important, because many manufacturers have run down stocks and reduced their supply pipelines so much that in some cases they are building cars to order.

Vauxhall, which the SMMT claims registered 842 cars under the scheme, claims a registration figure of 2,023. It's the same with Chevrolet (SMMT claims three cars registered under the scheme, the company claims 1,300), Ford (4,299 versus 6,700), Toyota (4,468 versus 6,500) and Hyundai (4,664 versus 5,436).

In its defence, the SMMT claims to have based its figures on its NVRIS figures, which are collated every two weeks, although it seems hard to believe that some of these big disparities are merely two weeks worth of sales.

While it seems likely the scrappage scheme is selling more cars than the official figures indicate, there have been mutterings that it is favouring car makers with cheap, small cars such as Hyundai. Its £7,695 i10 can be purchased under the scrappage scheme for £4,995.

Vauxhall says the overall effect has been positive, however, with about six per cent more people visiting its showrooms giving the sales force a chance to sell vehicles with scrappage discounts or not.

And has the scheme decimated Britain's classic car fleet, as was claimed last week? Certainly there are apocryphal stories of dealers being offered immaculate classics in part exchange for a tiny Eurobox, but few people seem to have seen this first hand.

Volkswagen has printed a list of every car it has sent to scrap and amongst the hordes of Renault Clios and a surprising number of Mercedes-Benz models, there is a single MGB and an old VW Scirocco.

Toyota claims to have been offered a Porsche and an Aston Martin as scrappage trade-ins and there is a story of one old lady who offered a lovely Hillman Minx, which was purchased by the salesman for £2,000 to save it from the crusher's jaws.

"A few nice cars have been handed in," says Matt Jones, features editor of Practical Classics magazine, "but that's not the fault of the scheme, just reckless owners."

Jones doesn't think the scheme is out to "get" classic cars, but it might be removing classics of the future. "It's really hard to call," he says. "Which will be tomorrow's classics? It seems like an academic argument, but it becomes real when they're all headed for the crusher."

One thing that does seem to have confounded market soothsayers is the extent to which cars are being handed round family and friends, with the worse one then being traded in for a scrappage exchange on a much more prestigious model.

Volvo coined it "the family roundabout" and uses it to explain the recent increase in orders for its £31,000-plus XC90. Jaguar, which has benefited from just 30 scrappage incentives sales, puts them all down to this effect, as does Volkswagen.

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