Ross Proposes Lobby for European Vehicle Scrappage

SUPPLIER MAGNATE WILBUR ROSS PROposes a pan-European scrappage program to offset an anticipated vehicle sales slide in 2010.

Speaking at a SupplierBusiness conference staged in conjunction with the Frankfurt auto show, the billionaire founder and chairman of International Automotive Components Group warns Europe's sales could decline by more than 1 million units next year, compared with 2009.

But Ross also says trade-in programs have had a positive impact this year, particularly in Germany.

“One EU-wide program would be easier to promote and easier for the public to understand,” he says, calling for the formation of a joint lobby comprising auto makers, suppliers, dealers and environmentalists.

The lobby would push for a program that awards rebates to consumers who trade in older vehicles for modern, fuel-efficient models.

Recalling the early-summer fight led by industry stakeholders and key politicians in the U.S., Ross offers hope.

“We had success in the U.S. with such an uprising, even though it came in the midst of vast government financing of the General Motors (Corp.) and Chrysler (LLC) bankruptcies,” he says.

Administration costs associated with a comprehensive EU scrappage program could be shared with a formula tied to the number of vehicles sold in each country, says Ross.

A scrappage scheme would be welcome because he anticipates flat sales or sales declines next year in the U.K, Italy, Spain and Germany, where an aggressive rebate program may have triggered a pull-ahead effect.

Germany's plan, which was linked to some 340,000 new-vehicle sales, was the most aggressive in Europe.

But it also could lead to a first-half decline when 2010 deliveries are compared with 2009 totals, Ross warns.