It was reported in the press that Prof Garel Rhys said to car parts component suppliers that only 7,000 UK made cars would be sold under the scrappage scheme, compared to the remaining 300,000 being imports. As only about 5% of car parts in those imports would be British then this would be bad for the UK’s balance of payments.

The TaxPayers' Alliance had criticised the scrappage scheme back in early June:

"With ordinary people struggling in the recession, the last thing we need is for our government to be wasting money propping up companies like the nationalised General Motors in the US that are already enjoying generous support from their own governments.

"If the Government wants to help those making cars in Britain, they should stop their proposed changes to road tax that would penalise people for buying cars with big engines like Jaguars and Land Rovers."

Cars going to Scrap Yards too soon?

The scheme could well see cars being sent to scrap and breaker yards up to four years earlier than one would normally expect. This would not necessarily be environmentally friendly as the production pollution costs for the cars being scrapped had been absorbed into the total emissions figures. The newer, more efficient car engines may not overcome the premature ending of some vehicles’ economic life.

Car Parts & Spares supply chain.

It remains to be seen how the government’s scrappage scheme will feed into the supply of parts & spares in the post sales market; however, a combination of more widely available used car parts from newer cars could well be a boon to motorists [especially those people needing quality used spares that cannot take advantage of the government backed scheme]. This could be a double hit to component manufacturers.

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