Tony O'Kane | Jun 3, 2009

VEHICLE SCRAPPAGE SCHEMES have gained traction in Europe and the USA, now Suzuki's local arm wants to see a similar program set up in Australia.

The importer says that such schemes have worked wonders for new car sales overseas, and that a similar strategy backed by the Australian government would give manufacturers a well-needed boost.

Suzuki also favours making the level of incentive proportional to the environmental credentials of the car to be purchased, which would also help lower the nation's carbon output.

"We’ve been closely monitoring the results from countries that have introduced a scrappage scheme and cannot fathom why the idea meets with such resistance here," said Suzuki Australia General Manager Tony Devers.

"In the UK more than 35,000 vehicle orders were taken in the two weeks after introducing its scrappage subsidy.

"In Germany, its scrappage scheme has increased sales more than 20 per cent."

Mr Devers says a vehicle scrapping program would also improve road safety, with outdated cars being replaced by newer, more advanced vehicles. Many older cars on Australia's roads lack even the most basic of safety gear, such as ABS, front airbags and three-point seatbelts on every seat; so there's certainly some truth to the claim.

Suzuki isn't the only one calling for a scrappage scheme. The Motor Traders Association of New South Wales is also calling for an incentive program, estimating that it would cost the government 4.5 billion over three years to run - a figure which Suzuki says should be mostly covered by increased income from import duty, stamp duty and GST.

The Federal Chamber of Automotive Industries, however, thinks otherwise. According to the FCAI, buyers incentives are already in place in the form of investment tax breaks, which recently rose from 30 percent to 50 percent.

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