Urging the government to reconsider its plans, SMMT CEO Mike Hawes said: “These schemes are an integral part of the remuneration packages that attract people into the industry and allow employees affordable access to the products they make. They are an important part of the new car market and provide a key source of nearly new vehicles to the used market.
“Removing these schemes would challenge manufacturers’ business models, restrict their ability to retain and recruit staff and constrain efforts to decarbonise road transport.
“These [ECOS cars] are new models, reflecting the latest technologies and, as such, are increasingly electric, so to cut off this new and used vehicle supply at exactly the time the industry must drive up EV adoption would be a perverse step.
“Not only would this undermine industry and government net-zero ambitions, it would also be counterproductive to economic growth, actually decreasing government revenues from lost VAT and VED, and hurt working people and their families financially.
“We would urge government to think again about this proposal and support the industry and its workforce at this critical time.”
The SMMT claims that each year, ECOS generates around 150,000 cars for the ‘nearly new’ market and are a valuable mix of popular vehicles and those, such as EVs, that customers would be wary of buying new.
However, used car valuation experts have disputed the magnitude of the impact that ending ECOS would have on used market supply.
A spokesperson for Cap HPI said: “It won’t have an impact on nearly new volumes. The numbers involved are tiny compared to daily rental. The [ECOS] vehicles are often on very strict mileage and there are strict rules on how long they can be kept.”
Meanwhile, Ed Steele, MD of leading automotive recruitment specialist Steele-Dixon, has predicted that employee recruitment won’t be so badly affected by the banning of ECOS.
