Manufacturers' half of scrappage subsidy being kept by foreign companies

Ling_Valentine

It should be simple: Whatever price you can buy a new car for gets reduced by £2,000 – one thousand pounds from the Government or taxpayer and one thousand pounds from the car manufacturer, under the new scrappage scheme.

However, I would suggest some manufacturers are embezzling their half of the subsidy contribution.

I am shocked, upset and flabbergasted that some car manufacturers are rebranding existing discounts as scrappage subsidy instead of matching the Government contribution with additional funds. This means that the extra £1000 meant for buyers, from the manufacturer, is rolled into profit and sent abroad.

Effectively, the taxpayer is giving £1000 and the manufacturer is giving nothing, not an extra Pound, Euro, Yen or Dollar. It is corrupt.

This scrappage contribution from the manufacturer should be additional funds, yet they are simply re-naming and substituting existing discounts that are available to all, even if you don’t have a car to scrap. In my opinion, this is cheating the UK taxpayer.

FIAT, the Italian automaker is the latest firm to try to avoid matching the taxpayer’s scrappage subsidy.

On their website, FIAT offer the Panda Active Eco at an offer price of £5,995, with no scrappage involved. The offered discount is not given a name; it just says “less £1,100”

http://www.fiat.co.uk/Content/?id=13689 - FIAT no-scrappage offer link

This discount offer runs until the end of May. However, for scrappage, FIAT simply withdraw it while it is still a current discount, rename it, then re-apply it.

In their recently launched scrappage campaign, FIAT simply magically rename its existing listed discount, calling it an ‘Eco Bonus’- it puts no new money in to match the taxpayer £1000 subsidy.

http://www.fiat.co.uk/Content/?id=17415 - FIAT scrappage offer link

This means that the extra £1,000 manufacturer subsidy meant for UK scrappage customers is simply kept by the Italians. It’s in an Italian bank. In my opinion, this amounts to embezzlement of manufacturer money due to the customer who scraps a car.

The UK taxpayer is having their money stolen, as without a fresh manufacturer contribution of the same amount, FIAT should not be allowed to make the offer.

FIATs are always discounted - as are 99% of all new cars. If this tactic is allowed, it means the motor industry can substitute existing discounts on any new car for their half of the scrappage subsidy, making a mockery of the 50:50 contribution and laughing at the UK taxpayer.

I suggest it is very simple; you should be able to get £2,000 off the “street” or offer price of the car, and as FIAT is offering the Panda Active Eco already for £5,995, so you should be able to buy one at that price under the scrappage scheme and get a further £2,000 scrappage discount, making a true cost of £3,995.

Quite different to FIAT’s advertised scrappage scheme price of £4,995. That’s one thousand pounds more expensive than the price the car should be sold for.

In general, manufacturers are wrapping their subsidy up in "final offer" prices, finance deals and selective advertising to AVOID putting their true share of the subsidy into a new car. Yet, the Motor Industry demanded this scheme, now they are cheating it.

The motor industry is going to lose consumer confidence if it tries these underhand tactics to grab ‘free’ money from the taxpayer subsidy, to benefit foreign owned companies. The taxpayers' money that we all contribute is meant to encourage UK buyers to change their car; it’s not a slush fund to subsidise greedy foreign carmakers. The Treasury and BERR should act to stop this profiteering. Misrepresenting like this should be prosecuted.

Ling Valentine, LINGsCARS.com (I declare an interest in the car industry)