Scrappage scheme provides boost to ailing car industry
Figures released by the Society of Motor Manufacturers and Traders (SMMT) today have provided some good news for the car industry, which has been suffering amid the economic downturn.
The SMMT said “We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations.”
The UK’s scrappage scheme was introduced on 18 May and pays consumers to get rid of their old cars and replace it with a more environmentally friendly car.
The £300 million initiative gives motorists £2,000 when they scrap their vehicle (which must be at least 10 years old). The Government will contribute £1,000, with the remaining £1,000 funded by car firms.
The scheme will run until March 2010 or until the Government funding runs out.
Returning to the figures released by the SMMT, new car registrations fell by 16% in June compared with June 2008 – less than the 25% drop reported in May.
However, the total number of cars sold in the first six months of the year is still 25.9% down compared with the same period last year.
The SMMT said that consumers appeared to purchasing smaller, less expensive cars with the Ford Fiesta being the best-selling model for a fifth time this year, while the mini part of the market jumped by 145.4% during the month.
Commenting on today’s figures, Paul Everitt, chief executive of the SMMT, said: “The pace of improvement is expected to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery.”
The latest figures from the Government show that up to 21 June, more than 80,000 orders for cars under the scheme had been placed.
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I doubt there’ll be much of a change on this front, the need for cars is constant, it’s just a question of which car you’re buying…