“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 2008” were the comments of Paul Everitt Chief Executive of The Society of Motor Manufacturers and Traders (SMMT).
New car sales for July 2009 accelerated year on year for the first time in nearly 15 months as the Car Scrappage Scheme encouraged car buyers back into car showrooms. New car registrations increased for the first time since April 2008 by nearly 2.5%. The SMMT declared the car scrappage scheme as an initial success by being the main catalyst for sales increases, highlighting 21% of last month’s registrations were the result of the scrappage scheme.
The Ford Fiesta was the big seller, continuing the buying trend for the majority of car buyers seeking the smaller economy car. Registrations of fuel efficient mini-car market rose more than three-fold in July whilst super-minis saw nearly a 16% rise.
The Car Scrappage Scheme is only set to run until March 2010 or when the scheme’s £300m budget spent. Lobby groups and dealerships are calling for the scrappage scheme to be extended, stating the scheme was earning more in tax revenue for the government than it was costing to fund.
In Europe, demands are being put forward for scheme extensions or alternatively for the schemes to be phased out at a slower rate. The €6bn German scheme is expected to run out of funds by September 2009.