Car scrappage scheme yields €70m to exchequer
He opens by stating that “according to SIMI figures, the scrappage scheme cost the exchequer €15m in lost revenue”.
We did not issue such a figure and the reality is very different.
As a result of scrappage, 17,500 more cars have been sold this year delivering an additional €70m in badly needed extra revenue to the exchequer.
Of this number, some 6,000 cars were supported by scrappage refunds totalling perhaps €7.5m, but even these 6,000 cars still contributed in excess of €15m in tax revenues to the state.
As Ireland doesn’t manufacture cars we have no option but to import them.
With our economy so heavily reliant on exports we are the last country that should be advocating a protectionist approach.
The “very little work for a massive profit” jibe shows just how out of touch Mr Job is at a time when the EU Commission confirmed, based on its research, that “margins for vehicle manufacturers and dealers are slim”.
Similarly, employment in garages is not almost entirely involved in repairing and maintaining old cars. The unfortunate reality is that, in general, cars in Ireland are not serviced as regularly as in other developed countries.
To underline this point the Irish motor industry lost some 11,000 jobs last year, including thousands of technicians who are currently unemployed.
The fall in service business has been almost directly in line with the fall in new car sales.
Scrappage will probably remove around 10,000 of the 600,000 cars more than 10 years old currently on the roads. Many of these cars are rarely taken to professional garages to support jobs.
As a result of scrappage stimulating the market generally, we will see more new cars and more used cars sold, resulting from the trade-in cycle on the non-scrappage sales.
This is what drives the service work in dealerships; the preparation for sale and the fact that newly-purchased cars, new and used, tend to be better maintained by their new buyers.
As a result of scrappage some 10,000 jobs have been secured in the industry and we are now beginning to see some recruitment in the sector.
Even if €15m had been expended on this, and it was not, it would have been good value in employment terms.
Finally on the environmental argument, new cars do have an environmental cost in their manufacture but they have a huge saving in terms of CO2 during their life.
A scrappage scheme car will save around 70gms of CO2 per km compared to the 10-year-old car it replaces. It will repay its manufacturing cost in less than two years and the cars sold under the scrappage scheme will save a total of 14,000 tonnes of CO2 every year into the future.
On the NCT test, this check every second year for older cars is required to comply with EU standards and only forces unsafe vehicles off the road. Encouraging car-owners to keep their older cars safe and more environmentally sound through regular servicing is, though, a very worthwhile goal.
There is no doubt it would save motorists money, reduce emissions and create more jobs.
Finally, if SIMI had the influence Mr Job suggests, then we would not have seen more than 100 businesses and 10,000 jobs lost last year.
In our campaign in support of scrappage we made our case and all of our arguments in public – an entirely democratic approach.
Alan Nolan
Director General
SIMI
5 Upper Pembroke Street
Dublin 2
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