November 2017

8 AFTERMARKET NOVEMBER 2017 BIG ISSUE www.aftermarketonline.net SCRAPPAGE: SCRAP THE NEGATIVITY? Vehicle manufacturer-led schemes have put scrappage back on the agenda. We were worried last time – should we be worried now? W ith new car sales on the slide during 2017, vehicle manufacturers delved into their big ideas bag and pulled out a classic from the turn of the decade: Scrappage. At the last count, 17 carmakers including, Volkswagen, Skoda, SEAT, Audi, Ford, Mazda Renault , Hyundai and Toyota had set up schemes. Money on the table varies, but some are offering motorists up to £8,000. While these are all manufacturer schemes with no government backing, they bring back memories of 2009-2010 when the official programme was offering motorists £2,000 to scrap their old banger. Many in the aftermarket were pulling their hair out at the thought of customers scrapping perfectly sound older cars to get a discount on a brand new vehicle that would probably not see the inside of an independent garage for some years. The freedoms of Block Exemption and the overall business acumen of the aftermarket may have mitigated the damage a few years ago, but now it’s back on the agenda. There are even suggestions that government might consider another official scheme to accelerate the exit of diesel vehicles from our roads. You know, those diesel vehicles that a previous government encouraged in the first place? Talk about dirty politics. Anyway, while the manufacturer schemes mostly expire by the end of the year, should we be concerned about the return of scrappage? Impact Wendy Williamson, CEO at the Independent Automotive Aftermarket Federation (IAAF) is not a fan: “In general, vehicle scrappage schemes can – and do – negatively impact the aftermarket long-term. An example of this is the 2009 scrappage scheme which removed up to 400,000 serviceable vehicles from the aftermarket and did little to support UK jobs, as most vehicles acquired under the scheme were from non-UK factories. Through offering consumers an incentive, scrappage schemes may be seen as a cynical ploy to increase new sales. And herein lies a major problem, as we’re not just talking about off-road cars consigned to the scrapheap that were due their MOT or service, or requiring replacement parts. While the independent automotive aftermarket is very adept at servicing newer vehicles, much of the servicing and repair of new, zero to three year old vehicles is with the main dealer. “New vehicle sales are declining, hardly surprising given the highs reached in recent months and years but, the repercussions for the aftermarket could be far worse with new vehicles flooding the market thanks to scrappage schemes.” Legislative loophole One obstacle of a potential newer vehicle parc for the aftermarket is the forthcoming Type Approval legislation. This relates to the diagnostics, repair and maintenance of vehicles and are an important step towards improving the legislative framework for independent operators. Over 184 amendments were approved and importantly for the aftermarket included a number of key revisions, the most important of which is keeping the OBD port to the vehicle open and accessible. Wendy has serious concerns here: “There is a risk that some of the vehicle manufacturers would use a Continued... facebook.com /aftermarket magazine