BUSINESS secretary Lord Mandelson’s scrappage scheme was dealt a blow at its launch yesterday, as two of the scheme’s backers delayed registration of their new vehicles at the eleventh hour.
The cash-for-bangers programme, designed to kickstart the ailing auto industry, gives motorists a £2,000 incentive when they trade in their old car for a new, cleaner model. Half, £1,000, will come from the government, and the remaining £1,000 from the industry.
But carmakers Ford and Honda said yesterday a dispute over how their contribution to the scheme was structured meant they would not register cars in time for the launch of the scrappage scheme.
“Detailed information on the scrappage scheme was not included in the Budget, when the programme was announced. We only got details on Friday afternoon.” Ford said.
“We’re still full square behind the scheme,” a Ford spokesman added.
Meanwhile, Honda has told its dealers not to register cars under the scheme until details of the funding are verified.
“We weren’t happy with what the government was suggesting,” Honda said.
Both carmakers are hoping to get car dealers to contribute a share of the VAT on the cars.
Mandelson, who has spearheaded the programme, has said the scheme is a “wonderful bargain,” and good news for the car industry.
But shadow business minister, Mark Prisk said yesterday he was writing to the secretary, “asking him to publish full details of the scheme, including its tax treatment by VAT, so that individuals and companies know exactly what is on offer.”
Meanwhile, Japanese carmaker Toyota launched the revamped Prius yesterday, the world’s best-selling hybrid car.
Toyota set sales targets of 10,000 units a month for the car, which is priced at Y2.05m (£14,157). The target is twice as high as rival Honda’s outlook for its hybrid, the Insight.