Car scrappage scheme ends today

The Government scrappage scheme, which comes to an end today, has been responsible for the sale of more than 12,000 cars this year, the Society of the Irish Motor Industry has said.

The scheme, which offered people trading in a vehicle aged 10 years or over a discount of up to €1,500 on a new low-emissions model, was introduced in the December 2009 budget.

Following a successful year in 2010, when new car sales increased by 56 per cent to some 89,000, the scheme was extended for a further by six months but with a reduced saving of €1,250 for individuals participating.

Alan Nolan, director general of the Society of the Irish Motor Industry, said the scheme had been responsible for the sale of about 30,000 new cars in its lifetime (18,000 in 2010) but that it had also helped to stimulate interest and pushed dealers and manufacturers to offer more enticing deals on other lines in their garages.

"There's no doubt it was a hugely important project for our industry at a time when it was in a serious downward spiral," he said.

Mr Nolan said the numbers employed in the motor industry fell by 10,000 as a result of the economic downturn with some 120 dealerships closing due to a fall-off in business. "Employment in the industry increased by 3,000 in the period and we're in a far better position now than 18 months ago."

He said the scheme had generated some €100 million for the Exchequer in taxes on car sales and further funds through the numbers returning to employment as well as savings on welfare payments.

Mike Finley, who operates dealerships in Naas and Newbridge, Co Kildare, said the scheme was not particularly profitable from a dealer's point of view because of intense competition in the market but that it had helped to provide turnover and maintain staff at a time when sales were "extraordinarily low".

Mr Finley said he did not expect the end of the scheme to result in a hangover for the industry - with sales collapsing once the incentive finished.

He said the majority of sales were traditionally carried out in the early months of the year and that those who bought after the summer would be business customers or people who upgraded their car every two or three years - as opposed to those availing of scrappage after 10 years.