Scrappage Programs Boost Passenger Vehicle Registrations in Western Europe

Similar positive effect expected if U.S. program is approved

SOUTHFIELD, Mich., June 18 -- Scrappage programs in Western Europe have led to 500,000 additional passenger vehicles sold in the region from January through May 2009, according to recent analysis by R. L. Polk & Co. While year-over-year registrations in Western Europe fell 12.6 percent (800,000 vehicles), the loss was mitigated by the effect of scrappage programs, which have been implemented in Austria, France, Germany, Greece, Italy, Portugal, Spain, the Netherlands and the United Kingdom.

Without the scrappage incentives, Western European passenger vehicle demand would have fallen by more than 20 percent, or 1.3 million units, in the first five months of 2009. European scrappage programs will continue to boost new vehicle sales throughout the remainder of the year. Polk estimates that Western European passenger vehicle registrations will fall just seven percent in 2009, to about 12.6 million units, compared to the 17 percent decrease that would have been expected without the incentives. Throughout 2009, scrappage programs are expected to contribute more than 1.3 million additional vehicle sales in Western Europe as the automotive industry tries to weather the current economic crisis.

"Assuming a U.S. version of the scrappage program is passed by Congress, we'd expect a similar positive impact on the U.S. market," said Lonnie Miller, director of industry analysis at Polk. "Our recent estimates indicate nearly one million additional vehicles would be sold in the U.S. in 2009. We'll watch the debate unfold as it continues to be reviewed."