It's been three and a half months since the car scrappage scheme was introduced and already we're seeing some signs of success.
So far, 154,927 orders have been placed. And because the government funding is enough for 300,000 new cars, that's the halfway mark.
Is that a sign of success?
Yes, and not just because half the money has been used.
I'm not looking at what individuals are doing. The 150k in new car orders represents artificial demand. Some of it was brought forward from the next couple of years, some of it new demand from people who don't mind owning a 10 yr old car.
The real sign of success comes from the car companies themselves. Take Nissan, for example. Not only are they advertising for the government subsidised scrappage scheme, their advertisements go further than the gov't offer: Nissan is willing to offer £2,000 on trade-ins on cars 8 years or older. Citroen and other dealers are also offering their own versions of the scrappage scheme, plus additional sweeteners?
What's the big deal? Well, the commentariat have been blathering on about 'What happens when the government scheme ends? Will the bottom fall out of the market?'
The answer is not likely. If car companies are healthy enough to offer their own more generous scrappage schemes, then why should it matter what happens when the government scheme ends in December?
More importantly, the sweeteners to buy new cars mean one of two things: either the companies are desparate and are cannabilising their own future sales (e.g. GM and Chrysler in 2008) or they are in a more stable position to offer the cash incentives. All signs point to the latter, rather than the former.
We're no longer talking about extended shutdowns and short-time working. New orders and extended shifts are the words being used in the same sentences as the big car makers.
And that means more about the contibution of the scrappage scheme than any numbers ever will.