New car sales continue to rise due to cash for bangers scheme
The Society of Motor Manufacturers and Traders (SMMT) has today revealed sales of new cars grew by 32% in October compared with the same month in 2008, boosted by the Government’s scrappage scheme.
October also represented the fourth consecutive monthly rise. July saw the first monthly rise, prior to that there were 15 successive months of decline.
The scheme, which was recently extended to cover an additional 100,000 cars and vans, pays consumers £2,000 to get rid of their old cars and replace it with a more environmentally friendly car.
Meanwhile the SMMT said the Ford Fiesta was the best selling car during October for the eighth time this year, as motorists opt for smaller cars.
New registrations rose 31.6% in October year-on-year, with a total of 168,942 new cars being sold.
Commenting on the figures, SMMT chief executive Paul Everitt said: “October has seen this year’s biggest monthly increase in registrations, with the successful scrappage scheme accounting for over 20% of them.
“We have seen additional demand created by the extension of the scheme and customers wanting to avoid the VAT increase planned for January. Encouragingly, there has also been an increase in demand in the fleet and business sectors, which will be critical in sustaining recovery next year,” added Mr Everitt.
According to Howard Archer, economist at IHS Global Insight, there were hopes that the rise in car sales “would help the UK economy return to growth in the third quarter, as had been the case with both Germany and France in the second quarter“.
“Nevertheless, the further marked improvement in car sales should help the economy to finally return to growth in the fourth quarter,” said Mr Archer.
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