Low-carbon transport plan fails to ignite UK motor industry

15 April 2009

16 April 2009 | Martha McKenzie-Minifie

A government plan to hand out inducements of up to £5,000 for drivers to buy electric cars offers little immediate relief to the struggling automotive industry or their suppliers, according to a trade group.

The Society of Motor Manufacturers and Traders (SMMT) told supplymanagement.com that the initiative was a "mid-to-long term" project and additional, immediate measures, such as a "scrappage" scheme, were being sought to help the ailing industry.

SMMT chief executive Paul Everitt said in a statement: "The industry is in the middle of its greatest economic challenge and immediate action to preserve the UK sector in the short-term is essential if we are to stake our claim in the global development of low-carbon technology for the future."

Business Secretary Peter Mandelson and Transport Secretary Geoff Hoon today launched the government's £250 million plan to promote ultra-low carbon transport over the next five years. The offer of subsidies of between £2,000 and £5,000 to motorists buying electric and plug-in cars from 2011 was central to the strategy.

In a separate initiative, Chancellor Alistair Darling is expected to reveal in next week's Budget an incentive scheme - known as "scrappage" - for motorists to trade old cars in for new ones.

The plan is aimed at boosting demand for new cars and helping struggling carmakers and their suppliers during the recession. Similar schemes have been introduced in continental Europe.



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