Speaking to letsrecycle.com this week, leading figures in the sector claimed that the presence of the scheme, which aims to incentivise the purchase of new, lower-emission vehicles, had hastened many peoples' decision to get rid of their old car or van and buy a new vehicle.
While the scheme, which began on May 18 (see letsrecycle.com story), could run until March 2010, it will end before then if the £300 million the government has committed to the initiative – an amount matched by vehicle manufacturers – runs out earlier, as is expected to be the case.
Duncan Wemyss, secretary of trade body the Motor Vehicle Dismantlers' Association (MVDA), said that, while vehicle dismantlers were generally positive about the scheme's impact, “the only minus people are talking about is whether when this comes to an end we might get a void”.
And, he explained that: “I am sure that, in many cases, it hastened the decision-making process for people looking to buy a new vehicle.”
His sentiments were echoed by Graham Price, manager of Cartakeback, one of the two service providers who offer a network of licensed vehicle dismantlers, which are known as authorised treatment facilities (ATFs), allowing vehicle manufacturers to meet their recycling and recovery obligations under the EU ELV Directive.
“There will be a void somewhere along the line unless the economy picks up,” he explained, though he added that he did not expect there to be a big void.
Industry
However, dismantlers were positive about the sector's ability to weather any dip in ELVs when the scheme ended, with Mr Wemyss stressing that “we're an industry that's very used to peaks and troughs”.
He explained that those vehicle dismantlers which had seen an increased number of ELVs could look to protect themselves against any post-scheme shortage by putting aside money accrued from the dismantling of the extra vehicles.
Meanwhile, Mr Price revealed that the popularity of the scheme among car buyers had raised hopes that vehicle manufacturers could look to continue some form of scrappage incentive after the government-backed initiative ended.
“We think the manufacturers might continue with something of their own in terms of rolling forward with the publicity they had from this scheme,” he explained, highlighting the benefits that it had offered manufacturers in terms of boosting their green credentials.
Impact
In general, vehicle dismantlers were positive about the scheme's impact, and Richard Reynolds, contracts manager for London-based ELV recycler Redcorn, claimed that it had “helped to kick-start the market”.
We think the manufacturers might continue with something of their own in terms of rolling forward with the publicity they had from this scheme
Graham Price, Cartakeback
With the BIS figures published this week revealing new car orders under the scheme had reached 154,927 between its initial announcement in the Budget in April 2009 and August 2, Mr Wemyss said: “I didn't think it would be as successful as it has been.”
In terms of its impact on the ELV recycling sector, he said: “It must be good, for those who have been able to participate. It has generated vehicles through the system and generated scrap metal that probably wouldn't have been generated.”
Over the last year, vehicle dismantlers have been hit both a slowdown in new car sales and a fall in the price of scrap metal – which makes up 75% of an ELV.
And Cartakeback's Mr Price claimed that: “Without the scrappage scheme the ATFs would have struggling.”
“We would have said the number of de-registrations would have gone down,” he explained. “I think its probably saved ATFs and made it easier for them to cope when the downturn in numbers does come.”
ATFs
When the scheme was launched, some in the sector had raised concerns that only the 300 or so of the UK's 1,000-plus ATFs that are members of either the Cartakeback or Autogreen service provider networks would benefit from the increased number of ELVs created by the initiative, due to manufacturers instructing their dealers to only send vehicles back through the network they used to meet their ELV recycling obligations.
However, Mr Wemyss explained that “some manufacturers have decided to use their pre-prescribed network and others have given their dealers the freedom of choice.”
He claimed that, due to concerns over a potential infringement of free trade, Ford had left the choice of ATF to its dealers, which “did enable a wider range of ATFs to participate”.
Vehicle dismantlers also said they were hopeful that the scheme would have created a better working relationship between dealers and ATFs.
“Dealers don't necessarily come in to contact with our members directly, but now they have had the chance to see how we operate,” Mr Wemyss explained, while Mr Price claimed that “the value of an ELV has been brought home”.
Certificate of Destruction
And, hopes have also been raised that the scheme's requirement for ATFs to issue a Certificate of Destruction (CoD) when a vehicle is dismantled, and not to simply tick a box on the V5 vehicle registration form, will highlight the usefulness of the CoD document.
Vehicle dismantlers have long campaigned for the CoD to be made mandatory as a means of ensuring vehicles only pass through approved vehicle dismantlers (see letsrecycle.com story).
Describing the CoD as the “cornerstone” of the scrappage system, Mr Wemyss said: “It has highlighted that the CoD is very important; it will hopefully show that the CoD is the document for end-of-life vehicles.”
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