Car sales boosted by scrappage

The scrappage scheme has boosted car sales, with registrations up 2.4 per cent in July.

The Society of Motor Manufacturers and Traders (SMMT) said the 'cash for bangers' scheme had started to have a "positive impact" on car registrations, which showed the first growth for 15 months.

However, the SMMT warned the registrations were still at a very low level, with year-to-date volumes down 10.1 per cent in July, based in the average between 1999 and 2008.

The scheme, which was introduced on May 18th, was brought in by the government following the Budget. It had been criticised when registrations did not rise, but the SMMT said it would take a few months for the scheme to translate into sales.

Paul Everitt, SMMT chief executive, said: "The impact of the scrappage scheme is clear and we are encouraged by the positive impact it has had, increasing new car registrations for the first time since April 2008.

"The industry still faces a long road to recovery and we urge government to take action to sustain economic recovery through easing access to finance and credit and delivering the loan guarantees set out by the Automotive Assistance Programme."

New car registrations for July were at 157,149 units according to today's figures, with the Ford Fiesta the best selling model eight times in the last nine months.

Registrations to private buyers were up for a second successive month, with a 33.4 per cent gain recorded in July. Although the private market was weak last year, the 2009 total was the best for the month since 2004.

"The impact of the vehicle scrappage scheme is now being felt, with thousands of cars bought by consumers via the scheme now on the road," said Sue Robinson, director of the Retail Motor Industry Federation (RMIF).

"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," she added.