Car manufacturers are introducing their own special offers to supplement the €1,500 scrappage scheme incentive announced in this month’s budget.

‘‘Manufacturers are putting together offers that are worth significantly more than the €1,500,” said Alan Nolan, director general of the Society of the Irish Motor Industry (Simi). ‘‘The manufacturers are out there competing for what will be an exciting market in January. So there is no doubt consumers will benefit in a competitive market.”

Ford was one of the first manufacturers out of the blocks, with an additional €1,500 discount on the Ford Ka, reducing the price of the cheapest model to €8,495.Conor Cavanagh, managing director of CAB Motors in Cork, said he expected the double incentive to significantly boost new car sales next year.

‘‘We most certainly welcome the scrappage scheme, and expect it to lead to more new sales,” he said. ‘‘Anything in this environment that boosts the market has to be a plus. We have already ordered extra stock of Kas, Fiestas and Focuses.”

Other manufacturers, such as Mazda and Renault, have also introduced offers matching the government’s €1,500 incentive, while Hyundai has a range of extra discounts knocking a further €2,000-€2,500 off the price of some of its most popular models.

‘‘The scrappage scheme is an incredibly welcome development for the market. Our offer means a five-door Hyundai i10 can be bought for only €8,495, plus delivery and related charges,” said Stephen Gleeson, managing director at Hyundai Ireland.

Gleeson said that the feeling among manufacturers and dealers was that consumers had been postponing new car purchases, as they were awaiting the introduction of the scrappage incentives.

‘‘Since the budget, we have seen a flood of calls from people who have been anticipating a scrappage offer. People have been waiting and they are certainly coming out now to take advantage of the scheme,” said Gleeson.

The scheme

The scheme, which will run from January 1 to December 31, 2010, will offer a €1,500 reduction in Vehicle Registration Tax (VRT) on the purchase of a new low-emissions car when an applicable used car is traded in against it.

New cars included are those in the low pollution A or B band for CO2 emissions (those with emissions of less than 140g/km).This group includes smaller cars, as well as some typical family cars such as the Ford Mondeo and VW Passat, and some premium diesel models such as the Audi A6, BMW’s 5 Series and the Mercedes Benz E-Class.

Cars eligible for scrappage must be at least ten years old. They must have been registered to the owner for at least 18 months prior to scrappage with either a valid NCT certificate or one that expired less than 90 days prior to scrappage.

Cars that have failed the NCT test within the previous six months are also covered.

Eligible cars must have been insured for at least 12 months in the 18 months prior to being scrapped, and must be scrapped 60 days before or after the new car is registered.

Scrappage must take place at an official End of Life Vehicles (ELV) treatment facility with a Certificate of Destruction issued.

The idea behind the scheme is to replace high-polluting cars currently on the roads with new environmentally friendly models, not to allow people to take advantage of wrecks they have in their yard.

‘‘It might be a banger, but it cannot be something you found in a field,” said Nolan.

‘‘It has to be something that was in use. It not about putting extra cars on the road, it is about replacing an older, higher emitting car with a new lower emitting model. However, if you bring a car to the NCT and it does not pass, you do qualify.”

Industry losses

Simi lobbied for the introduction of the scrappage scheme as a response to the carnage being wrought on the Irish motor industry by the recession.

An industry which employed 45,000 people in January 2008 has since lost about 11,000 jobs.

Seventy motor dealerships - including well-established names such as EP Mooney, Belgard Motors and Cloghran Motor Company in Dublin, Galway-based Tom Hogan Motors and The Drive Motor Group in Co Cork - have all gone into liquidation this year.

‘‘Scrappage schemes in other countries have been about trying to keep the registration numbers up at normal levels,” said Nolan. ‘‘In our case, it was about jobs in our sector. We have lost about a quarter of the people who were working in the industry in less than two years and we have seen very well-regarded household names failing.

‘‘Many more people in the industry were looking to next year with apprehension. If we stayed at this level for a bit longer, it was likely that another 10,000 jobs would have disappeared.”

Cavanagh said that CAB Motors had already cut 25 staff from a high point of 65 in 2007.

He said that the new scrappage scheme might have been introduced too late for many in the industry.

‘‘If something had happened prior to this it might have helped to keep people trading. I would say there will be more dealers unfortunately going out of business next year,” he said.

‘‘Timing-wise, it is key that it has been introduced for January, as the first three months of the year are key for us.

If the year starts well, then generally the whole year will be good. If the scrappage scheme brings a lift of about 13,000 extra cars to, say, 70,000 new cars next year, it will give a key message that the worst is behind us.”