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August 5, 2010    

UK car sales fall 13% on year in July

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by Kay Murchie

The Society of Motor Manufacturers and Traders (SMMT) has today announced UK car sales fell by 13.2% in July compared with the same month in 2009.

It was the first fall in a year following the withdrawal of the scrappage scheme and sales are expected to continue their downward trend in the next few months.

The SMMT said the number of new cars sold in the month was 136,446.

The Society has already warned that the latter half of the year will be challenging and sales for the full year are likely to fall as a result of the end of the ’cash for bangers’ scheme.

The £400 million initiative, which was launched in May 2009 to boost the ailing car industry, paid drivers of cars at least 10 years old £2,000 off the price of a new vehicle.

However, the scheme ended on 31 March.

Paul Everitt, SMMT chief executive, said he was not surprised by the fall.

“A drop in private registrations compared to the scrappage-fuelled months of 2009 was expected,” he said.

“Subdued consumer confidence and a still-fragile economic recovery make the outlook for the remainder of 2010 challenging, but a stronger-than-expected first half means full year volumes are still forecast to exceed 2009′s total.”

However, in the year to date, new car sales are still 15% higher on the same period a year ago.

Furthermore, future car sales could be boosted by the forthcoming hike in VAT, due to come into force next January.

The extra VAT will lift the cost of a £15,000 new car by around £375 so consumers may consider bringing their car purchases forward, according to the SMMT.

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