06 August 2009

Motor Sales Boosted By Scrappage Scheme

Car sales have risen for the first time since April last year, according to the latest industry figures.

The Society of Motor Manufacturers and Traders (SMMT) said 157,149 cars were sold in July, an increase of 2.4% on last July's figures.

The SMMT said that the rise was due to the introduction of the government's car scrappage scheme, which offers £2,000 to motorists who scrap cars registered before August 31 1999 in order to pay a new car.

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

However, Mr Everitt warned that the industry still faced "a long road to recovery" and said that the government needed to ease access to finance and credit, as well as deliver loan guarantees.

The government put £300,000 into the scrappage scheme. It is due to end once the money runs out, but it is now thought that there could be calls to extend the scheme.

In spite of the recent good sales, the SMMT said that it still expected car sales to fall 14.4% to 1.82 million this year, followed by a further 5% fall to 1.73 next year.

(KMcA/BMcc)