Scrappage scheme boosts German car sales

Figures from Germany have confirmed that scrappage schemes can significantly boost new car sales.

The German scrappage scheme has helped their national car industry record its highest levels of domestic sales since 1992.

The plan allows would-be buyers to trade-in their car if it's more than nine years old for €2,500 (around £2250) towards the purchase of new, more environmentally friendly vehicle.

Germany's new car sales increased by 40% in March compared with the same period in 2008.

Both Volkswagen and Audi have reported a better first quarter than last year, which they attribute to the scheme.

However, BMW has not followed in the footsteps of its counterparts, reporting a decrease in sales of 13%.

The scrappage scheme is likely to boost sales of smaller, greener cars from countries such as France, Italy and Japan rather than larger German cars.

Germany's car industry is also heavily dependent on export markets, which account for 80% of total sales - and amid worldwide recession, global sales are down.

The results from Germany will put increased pressure on Chancellor Alistair Darling to announce a similar scheme in the Budget on April 22.

Brown predicts 'green' Budget

Prime Minister Gordon Brown has pledged to help the UK's ailing economy by placing electric and hybrid petrol-electric hybrid vehicles at the forefront of a 'greener Britain'.

The Prime Minister has hinted that trials of electric cars, using a network of roadside charging points, and incentives for manufacturers building environmentally friendly vehicles will be announced in the budget on April 22.

Mr Brown also confirmed that the Government is considering plans to introduce a scrappage scheme, which many car industry leaders believe to be essential if the UK's car makers are to survive the economic downturn.

However, the Premier also warned that there would be little room for other financial stimulus, which could pave the way for increased fuel duty and road tax charges.

The trials of electric vehicles are likely to start in 2010, taking place in up to three cities throughout the UK.

The Independent newspaper reports than councils will be invited to submit proposals to become the first of Britain's "green cities".

The Prime Minister also said he would consider buying a fleet of electric cars for cabinet ministers, allowing the Government to lead from the front.

Mr Brown also told the paper that creating a low-carbon economy in the UK would create up to 400,000 jobs by 2017.

Saab deal expected by the summer

Saab has around 20 potential buyers interested in buying the company and expects it to be sold by the end of June, according to reports.

The interested parties have not been identified, but China's Dongfeng Motor Corporation is thought to be among them.

The information was released yesterday at a court hearing in Vaenersborg, Sweden, where Saab put its reorganisation and business plans to its creditors.

The news comes six weeks after the firm sought bankruptcy protection from creditors following General Motors' announcement that it would cut links with the unprofitable Saab within a year.

Saab is also applying for a total of $1 billion (around £700 million) worth of support from the European Investment Bank and General Motors in an attempt to become profitable by 2011.

The manufacturer is also preparing to release three new models in the next 18 months. This is an important shift in strategy after the company's chief executive, Jann-Aake Jonsson, described Saab's thin product base as its 'Achilles heel' in Monday's court hearing.

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Car buyers learn to haggle

More of the UK's car buyers are prepared to haggle on the price of a new car as the recession bites, according to new research.

The survey, carried out for Sainsbury's Finance, has revealed that the percentage of would-be buyers who are prepared to haggle has increased from 79% in August 2008 to a current figure of 90%.

However, the UK's car buyers still need to improve their bartering skills, as the report has also exposed that a third of them are prepared to haggle only slightly.

The unwillingness to haggle hard could mean car purchasers are paying up to £200 million a year too much for cars, according to the research.

The report says buyers should be aiming for an average discount of around £1780, a figure that's double what could have been expected in 2001.

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Jaguar Land Rover to receive loan

Jaguar Land Rover will tomorrow get the go ahead for a loan of £270 million from the European Investment Bank (EIB).

Government sources have told the BBC that Jaguar Land Rover has met the EIB's loan criteria. A loan of £364 million will also be shared between Nissan's factories in Sunderland and Spain.

There is a strict criteria for any loan to be approved by the EIB, which requires car makers to invest in green technology to help lower emissions caused by manufacture and use of its vehicles.

Jaguar has already cut 450 staff this year and is expected to make a further 300 workers redundant from its 14,500-strong workforce.

Scrappage calls as sales slump further

Car sales have fallen by 30% during March, resulting in increased demands for a scrappage scheme to be introduced.

The number of new UK registrations in March was 313,912, down from 451,642 the previous year.

The drop in sales has been described as '"disappointing" by Paul Everitt of the Society of Motoring Manufacturers and Traders (SMMT).

He also renewed the SMMT's call for a scrappage scheme to be introduced by Chancellor Alistair Darling.

'The scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand,' Everitt said.

Despite numerous meetings with the Government, Everitt says that no such commitment has been made.

Calls for the scheme to be introduced in the UK come as many European countries have experienced increased car sales after introducing scrappage schemes of their own.

Germany's year-on-year car sales were up by 40% in March, a figure that was boosted by the success of their own domestic scrappage scheme.

Orders for new cars in Italy have also increased by more than 30% with the introduction of their scrappage scheme. French and Spanish car sales have also increased over recent months.

Paul Williams, chairman of the Retail Motor Industry Foundation, said: 'Measures to help to revive new-car sales in the UK, including the introduction of a vehicle scrappage scheme, must be enacted as soon as possible.'

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Car makers offer free payment protection

A host of manufacturers are revealing free payment protection plans, hoping to entice potential car buyers into showrooms.

New car sales are down and car makers believe that the threat of redundancy is discouraging car buyers from making major purchases.

In response, Honda has announced a range of offers including free payment protection against redundancy.

It is available on a range of Civics and CR-Vs purchased through Honda Finance. It means that Honda will cover monthly repayments for up to a year should customers be made redundant for a period of more than three months.

Payment Protection Insurance is also free with all new C30, S40 and V50 models bought through Volvo Car Finance.

Should customers become unemployed during the first 18 months of owning the car, Volvo will pay all monthly payments for up to a year. In addition, the insurance provides life, accident and sickness cover, too.

Renault is offering free payment protection insurance for all new cars bought in April through Renault Finance, and it will cover the customer's payments for the first 12 months should they be unable to work through accident, sickness or redundancy.

As will all insurance, terms and conditions apply, so check with your dealer for full details.

These offers should not prevent you from haggling with a dealer to get the lowest price on your new car.

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Toyota plans more cuts in the UK

Toyota is planning further cutbacks in production at its factories in the UK.

A shorter working week or a temporary shutdown is expected to be announced on Wednesday, as Toyota seeks to slash its costs in the face of sharp falls in new car sales.

A spokesman said: 'We have to reduce our costs further. Our employees recognise that and we are seeking agreement with the unions.'

The manufacturer employs more than 4000 workers at its factories in Burnaston, near Derby, and Deeside in North Wales.

The plant in Burnaston builds the Avensis and Auris models, with 85% of the cars exported. Toyota's European sales fell by 10% last year.

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National speed limit maybe cut

The speed limit on rural roads in the UK may be cut from 60mph to 50mph.

Government ministers are considering a plan to change limits on "non-built-up single-carriageway roads" that make up more than 50% of the national network.

Research has shown that such a change could save up to 250 lives a year. The move is also favoured because it would save fuel and cut CO2 emissions.

The lower speed limit would automatically apply to rural roads unless the local authority could demonstrate that it was safe for the 60mph speed limit to remain.

Motoring groups have expressed concerns that cutting the limit could actually result in more casualties on rural roads.

AA president Edmund King said: 'There are many single-carriageway roads where 60mph is appropriate, but local authorities may not bother to make the case for keeping the existing limit. This will lead to frustration and could raise the risk of dangerous overtaking of law-abiding drivers doing 50mph.

'Many crashes on rural roads happen not because the speed limit is too high, but because reckless young drivers lose control.'