Car scrappage scheme a sustainable strategy for the Irish car industry?

Abstract

In the last decade a certain number of car scrappage incentive programs have been promulgated by western countries to instigate earlier replacement of older polluting vehicles with more cleaner and efficient ones. Traditionally, the main reason why various governments introduce car scrappage schemes was to reduce pollutant emission from older cars, and also improve the safety of transportation in general. The more recent scrappage schemes being implemented by two western countries in the past two years or so, still maintains the traditional theme of replacing older vehicles with more efficient ones. However this time around, it’s being implemented due to the economic meltdown which has impacted gravely on the car industry and sales figures of most dealerships in the western hemisphere. It could be conclusively stated that the recent introduction of car scrappage schemes, were motivated by the prevalent economic circumstances which has resulted in job losses, low consumer sentiment and the vulnerability of most world economies. The researcher decided to undertake the subject of car scrappage scheme as focus of his research, in other to establish the economic viability of the scheme to the car industry in the west of Ireland. The researcher has compiled a detailed literature on previous and current scrappage schemes and its implications on the environment and also on the wider economy. In conducting this research, the researcher compiled a detailed methodology to assist him in the research. In gathering information from the prospective respondents, the researcher used an open-ended questionnaire, this form of questionnaire was deployed to gain more in-depth information and to allow respondents give a more thoughtful response and comments to the desired question. The analysis and discussion chapters threw up quite intriguing themes, which formed the platform for arguing the sustainability of the car scrappage scheme. Findings showed that the car scrappage scheme has being instrumental in job retention and stability in the car industry, the scheme has also being beneficial to the environment in the sense that more environmental and low emitting cars were sold through the scrappage scheme, which translates to reduction of C02 emissions in the environment. There were also resentment from the respondents on the Irish governments’ timing of the introduction of the car serappage scheme. Most respondents stated that the government should have being swift in their action, rather than waiting to see how similar car serappage schemes performs in other countries This researcher recommends that the government should extend the scheme beyond its December 2010 expiration deadline, in order not forestall the economic gains of the serappage scheme. The researcher is also advocating more partnership between government and car manufacturers/dealerships; with the view of developing more efficient and greener vehicles that would sustain the changing consumer trends.