UK’s car sales surged for the second month in succession in August, corresponding to the government’s scrappage scheme for cars more than ten years old.
Data released by the Society of Motor Manufacturers and Traders Limited (SMMT) reveals that the UK’s new car sales surged for the second consecutive month in August 2009 fuelled by the car scrappage scheme, reported
FOREXTV.
New car registrations in the UK reported 6% year-on-year growth to 67,006 Units in August 2009, faster than the 2.4% growth in July 2009. Registrations from private buyers and that of small cars once again soared up strongly during the month. The rise in July 2009 was the first since last year’s April.
The SMMT, in a different report, noticed that 102,071 vehicles have been registered so far under the scrappage scheme since its introduction. With 16,848 Units, scrappage accounted for 25.1% of the new car registrations in August.
As stated earlier, scrappage incentive scheme, which came into force in May 2009, boosted the car sales, particularly the sales of smaller models. The scheme offered incentive of GBP 2,000 to the people scrapping their cars older than ten years to purchase a new one. The scrappage scheme will be running till the end of February 2010, or till the time government funding gets exhausted. It is noted that the government has assigned an amount of GBP 300 Million for the scheme.
Paul Everitt, chief executive, SMMT, stated, “The scrappage incentive scheme is having a positive impact but with consumer and business confidence still fragile, there remain significant risks ahead,” reported
BBC on September 4, 2009. He further added that it is extremely important for these early indications of recovery to sustain into 2010.
In the meantime, all eyes are now set on the performance in the important plate-change month of September. Some of the industry lobbyists are demanding for the extension of the scrappage scheme on the exhaustion of scheme funding so as to maintain the growth.
According to a Research Analyst at
RNCOS, “The scrappage scheme offering strong returns on used cars is providing the much required boost to the profitability of the motor retail sector. So far the scheme has proved highly successful, but as the economic climate is still very fragile and demand is still surging, extension of the scheme seems vital.”
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