Car sales bolstered by scrappage scheme
Tuesday, 06 Oct 2009 15:56
Car sales for September were bolstered by government's scrappage scheme, new figures show
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New car registrations were up 11.4 per cent in September, bolstered by the government's scrappage scheme.
The Society of Motor and Manufacturers and Traders (SMMT) said the cash for bangers scheme had continued to provide stimulus for growth, with registrations for private buyers and of small cars rising strongly in September.
Scrappage accounted for 21 per cent of September's new car registrations, or 77,316 units.
Paul Everitt, SMMT chief executive, said: "New car registrations rose for the third month in a row in September. Market conditions remain challenging with demand being underpinned by the extremely successful scrappage incentive scheme.
"The extension of the scheme will help to sustain demand through the latter part of this year and into 2010. This will allow economic recovery to strengthen and safeguard valuable industrial capability."
At the Labour party conference business secretary Peter Mandelson said the scheme would be extended into 2010, to fund an extra 100,000 cars and vans.
Today's figures have been welcomed, with the Retail Motor Industry Federation (RMIF) saying scrappage has had a positive effect on the whole of the market.
Sue Robinson, director of RMIF, said: "Car dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers.
"The scheme has been highly successful, and with an extension in place, we expect demand to continue for the latter part of the year."
Ms Robinson's words were echoed by Barclays, who warned the end of scrappage and the VAT increase next year could undo all the hard work to keep the motor industry buoyed.
Keith Parry, head of motor retail at Barclays Commercial Bank, warned: "The ending of the scrappage scheme in February at the latest and the VAT increase at the start of the year could leave the sector without any support at a time when there are likely to be increasing pressures on consumer spending on big ticket items."