J.D. Power and Associates Reports:
Vast Majority of Consumers in the UK Support Introduction of Vehicle Scrappage Incentive
 
Many Believe Budget Announcement Will Stimulate the Car Market in the UK During the Next Six Months

LONDON: 1300 BST, 22 April 2009 - Two-thirds of respondents in a recent online survey conducted in the UK state they believe that the government-backed £2,000 “scrappage” incentive for vehicles nine years of age and older will be likely to stimulate the new-vehicle market, according to a J.D. Power and Associates special report on the UK scrappage incentive, which measures the attitudes of both qualifying and non-qualifying vehicle owners. Furthermore, 40 percent of all respondents with qualifying vehicles indicate that they would be either “likely” or “very likely” to purchase a new vehicle within the next six months as a direct result of the incentive.

More than two-thirds of all respondents indicate they were aware of or familiar with the incentive plan prior to the budget announcement today, with 58 percent of those owning qualifying vehicles indicating they would actively consider looking for a brand new car as a direct result of its introduction. Respondents indicated the brands they would consider purchasing, suggesting that a wide selection of volume brands are likely to benefit. Approximately 13 percent of respondents indicate they would consider purchasing a vehicle from a premium manufacturer.

The report finds that respondents whose vehicles are too new to qualify for the incentive were also positive about the initiative.  Twenty percent of respondents who own vehicles less than nine years old and who had not considered changing their vehicle recently due to the economic climate state they would now definitely consider purchasing a new vehicle as a direct result of the incentive being introduced.

“This is an essential boost to the automotive industry at a critical time,” said Susan Barnes, European automotive director at J.D. Power and Associates. “It is good to see such positive intentions amongst all respondents, whether they qualify for the incentive or not. Ultimately, the level of success achieved by the initiative will also depend upon the activity that manufacturers are able to combine with the government-backed incentive to make buying a new car really attractive at a time when levels of consumer confidence are so low.”

As a result of the government incentive measures announced today, J.D. Power and Associates forecasts an increase between 100,000 and 150,000 units in new-vehicle sales in the UK.

"Our UK demand forecast for 2009 has been stable since a downward revision in late 2008" said Pete Kelly, senior director of European forecasting operations at J.D. Power and Associates. "We believe this incentive will have a positive impact on sales during its operation, boosting sales, though this will be tempered by the impact on potential buyers of the poor economic environment and negative outlook for employment."

The report also finds that there is strong awareness among respondents in the UK regarding a £5,000 payment incentive for buyers who purchase a new electric or plug-in hybrid vehicle starting in 2011. Approximately 63 percent of respondents indicate awareness of this program, while more than 50 percent indicate that its introduction would make them likely to consider purchasing such a vehicle at that time. Only 31 percent of respondents currently indicate that they are likely to purchase a qualifying vehicle; however, this could be attributed to consumers’ lack of knowledge about the “green” cars to which the payment applies, a lack of clarity regarding the different technologies that will be available and confidence regarding the logistics and infrastructure for running and charging these vehicles in two years’ time.

When asked to indicate a preference between the two incentive plans, 29 percent of owners whose vehicles qualified for the £2,000 scrappage incentive say they would be motivated by this initiative, compared with only 15 percent who preferred to wait for the £5,000 payment.

“J.D. Power and Associates automotive studies indicate high levels of customer satisfaction with hybrid models that are currently available,” said Barnes. “However, with 2011 only two years away, it is clear that manufacturers still have a considerable task ahead in de-mystifying the concept of green cars and in convincing consumers that they present a real alternative to their current vehicles.”

Other report findings, of those respondents expressing a view, include:

• Forty percent of owners with vehicles nine years of age or older state their “car needs replacing now,” compared with 17 percent of owners with vehicles younger than nine years who say the same.
• Thirteen percent of consumers currently own a premium-brand vehicle as their first car.
• More than three-quarters of consumers (76%) believe that “green” cars are designed less attractively than conventional petrol or diesel vehicles.
• Nine out of 10 consumers do not believe that the infrastructure needed to support “green” cars will be in place in the UK within two years.
• While 82 percent of consumers believe that electric or plug-in vehicles help the environment, only 66 percent claim to be very interested in them.
• More than three-quarters (76%) of respondents say that they do not believe that electric or plug-in hybrid technology is “proven enough.”

The April 2009 J.D. Power and Associates special report collected feedback from online respondents regarding recent government proposals for a budget announcement of a £2,000 scrappage incentive and a £5,000 payment for electric and plug-in hybrid cars starting in 2011.  The survey was fielded between April 20 and April 21, 2009, and is based on the responses of 1,211 online panelists. The survey had national UK coverage, and covered a wide range of driver ages and vehicle brands owned. 707 (58%) of the respondents owned a vehicle of nine years or older and would qualify for the £2,000 incentive and 504 (42%) of the respondents owned a younger vehicle that would not qualify.

About J.D. Power and Associates
The European headquarters of J.D. Power and Associates is located in Guildford, UK. With world headquarters in Westlake Village, California, U.S.A., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies:
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com.

Note to editors:
This report was completed prior to the final budget announcement and respondents were surveyed on the assumption that the vehicle scrappage incentive would apply to all vehicles nine years of age and older, whereas today’s budget announcement by Alistair Darling referred to a qualification age of ten years and older.

Media Relations Contacts:
Susan Barnes; Director, European Automotive; J.D. Power and Associates; 10-12 Frederick Sanger Road; Guildford; Surrey GU2 7YD; UK; +44 1483 207600; susan_barnes1@jdpa.com

John Tews; Director, Media Relations; J.D. Power and Associates; 5435 Corporate Drive, Suite 300; Troy, MI  48098  USA; 001 248 312-4119; john.tews@jdpa.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com

J.D. Power Special Report
UK Consumer Results

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