ACEA

Fleet renewal schemes in 2010

February 2010 -Currently, eight EU countries are using a fleet renewal programme, including market incentives and car scrapping schemes. Since the end of 2008, fourteen* Member States have employed such schemes.

European automakers have voiced support for these measures as they can and have helped bridge the difficult and exceptional economic downturn. Similarly, a phasing-out of fleet renewal schemes would avoid a sudden decline in sales when the scheme ends. The abrupt end of some of the schemes makes the new vehicle market outlook for 2010 particularly difficult in the countries concerned.

In addition to fleet renewal measures other supportive actions remain necessary as well, including a significantly improved access to finance. The EU should also ensure a level playing field and safeguard the internal market. Developing a smart industrial policy at the EU level will be crucial to maintain Europe as an attractive area for innovation and manufacturing.

• Overview of vehicle scrapping schemes in the EU 2010 (PDF, updated 01/04/2010)
• Overview of vehicle scrapping schemes in the EU 2009 (PDF, updated 12/02/2010)

The automotive industry faces the biggest downturn in recent history.

• In 2009, new passenger car registrations fell by 9.5% compared to the pre-crisis levels of 2007 (1.6% compared to 2008)
• Commercial vehicle registrations in the EU declined by 32.4% compared to 2008.
• The decrease in 2009 comes on top of the 8% decrease registered in 2008. That decrease in itself was the biggest decline in EU car sales since 1993.
• The trend is the same around the world: compared to 2007, 2009 car sales were down 35% in the US and 11% in Japan. Even though some emerging markets, such as India and China, fared much better, little or no growth is expected in others. For example, registrations in Russia were down 41% in 2009.
• Click herefor the latest European registration figures

Fleet renewal schemes generate additional car sales in 2009

• In 2009, the car markets in countries that introduced a scheme often fared better than others. For instance, passenger car registrations increased by 23.2% in Germany, by 10.7% in France, and by 8.8% in Austria.
• Fleet renewal schemes help to soften the market decline and spread it over several years.
• The overall impact on sales is positive. In Germany, for example, it was noted that a significant number of people who traditionally drove used cars now purchased a new car for the very first time.

Fleet renewal schemes produce many other positive effects

• When sales increase, tax revenues, consumer confidence and vehicle production increase (more than 80% of all cars sold in the EU are produced within the EU).
• More jobs are maintained in production facilities, component manufacturing and dealerships, saving Member States expenditure for unemployment benefits, job search assistance, retraining and other social welfare costs.
• As the schemes involve cars at least 9 or 10 years old, their replacement benefits environment and safety as well:
  - CO 2 and pollutant emissions decrease, noise is reduced.
  - Old, polluting vehicles are scrapped instead of being exported to Central and Eastern European countries, as was often the case until recently.
  - Better equipment such as ABS, ESC, airbags and navigation systems makes vehicles safer.

Conclusions

• Existing fleet renewal schemes should be phased-out rather than ended abruptly.
• The schemes should consist of sufficiently high scrapping incentives for old vehicles (Euro 0, Euro 1, Euro 2), tax incentives/exemptions for the purchase of new vehicles
  and/or specific measures to promote the sale of commercial vehicles.
• They should be simple. For example, the Spanish government has recognised that its former scheme was ineffective due to its complex implementation that requires the involvement of banks and finance companies. Now a much easier system has been put into place.
• Member States should coordinate their schemes and phase-outs with each other to the extent possible to safeguard the internal market.
• The EU and its Member States should take additional measures to help the automotive industry through the crisis and ensure its competitiveness in the longer term. These measures should serve in particular to improve access to liquidity, for manufacturers and for suppliers, and financing of investments in clean and fuel-efficient technologies. The EU should develop a smart industrial policy at the EU level to maintain Europe as an attractive area for innovation and manufacturing.

• Overview of vehicle scrapping schemes in the EU 2010 (PDF, updated 01/04/2010)
• Overview of vehicle scrapping schemes in the EU 2009 (PDF, updated 12/02/2010)

*including the Greek programme that ended in November.

last updated 06/04/2010

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