Motor Trade – The returnable car

Stand by for the returnable car. It is due to arrive next year, thanks to a new EU law expected to be passed by the European Parliament on Tuesday.

The End of Life Vehicles Directive will force manufacturers to take back old vehicles free of charge when they reach the end of the road. The makers are bitterly resisting the law, claiming that it would drive them into bankruptcy and will have a catastrophic effect on the Motor Trade Industry.

The Impact this could have on Manufacturers and also Motor traders is that there are going to be fewer older vehicles on the road that could be sold on. Many Motor Traders prefer to buy older cars, to make a small profit to sell on and if manufacturers are not allowed to sell these on this could have a dramatic effect on the Motor Trade Industry.

The directive is designed to accelerate recycling by encouraging car firms increasingly to make their models out of reusable materials. The idea is that if they have to pay to collect and dispose of old cars, they will want to offset the costs by selling them on rather than destroying them.

Every year, eight million cars come to a halt for the last time in Europe, two million of them in Britain, but many of these vehicles could be sold on for someone to repair and this is why Motor Traders could be impacted massively also. The metals that make up three-quarters of their weight are already recycled. But the rest – plastics, rubber, glass, oils, paint, textiles and other materials – are destroyed and one in every 10 tonnes of hazardous waste in the EU comes from motor vehicles.

Manufacturers and environmentalists are agreed that more of the cars must be recycled. The industry is aiming to recover 95 per cent of their materials within 15 years. But the directive would go a step further, requiring car makers to take back their products at the end of their useful lives.

It has already been cleared by the European Commission and environment ministers, and is expected to pass through the European Parliament essentially intact, too, although some MEPs have put down amendments, supported by the motor industry, to try to weaken it.

Under its provisions, manufacturers will have to take back all vehicles put on the market from next year, when they reach the end of their lives. And, soon they will have to collect all defunct old vehicles, whenever they were made.

The industry particularly dislikes this last provision. It says it is retrospective, and therefore illegal, and would cost £2.5bn in Britain alone, threatening “some major manufacturers” with bankruptcy.

The Society of Motor Manufacturers and Traders says the “the imminent arrival” of the directive “is certain to affect the competitive position of the UK motor industry and place a huge financial burden on vehicle manufacturers”.

Isis Insurance understands the impact this is going to have on vehicle manufacturers when combined with the current economic climate. Also with many motor traders working from home or from commercial premises this is also going to have a great impact on that industry too.

The effect these changes may have on the motor traders and the motor trade insurance industry is something that the European Commission and Environment Ministers must consider.

This entry was posted on Wednesday, September 1st, 2010 at 2:03 pm and is filed under Motor Trade. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.