Kevin Gaskell, motoring expert and Chairman from Motoring.co.uk, has given his prediction of how the automotive industry will react to the ending of the governments scrappage scheme.

"The scrappage scheme has brought forward into 2009 many new car sales which normally would have occurred in 2010.

"In countries where the scrappage scheme has already finished, such as Germany, the sales trend is sharply down and the market is fearing a drop from circa 3.8million registrations in 2009 to possibly as low as 3 million in 2010.

"It is possible that the UK could follow suit unless alternative promotional activities are introduced by the car manufacturers and dealers."

He continued: "The government has announced that the official scrappage scheme will end in February but I envisage similar forms of support will continue, funded by the manufacturers.

"It should not be forgotten that whilst the government has been providing £1000 for each car to be scrapped they have, in return, received VAT on the cars being sold resulting in a total net gain of around £150 million over the life of the scheme.

"The other £1000 of the £2000 scrappage premium was provided by the manufacturer or dealers themselves."

Mr Gaskell said a number of manufacturers are likely to continue to support new car sales with their £1000 contribution.

This could take the form of lower new car prices, subsidised finance schemes, free servicing or other similar customer support measures which should help to mitigate the likely drop in sales.

He added: "These alternative support measures should be highly attractive to owners of older vehicles which didn't qualify for the scrappage premium and so opens the opportunity to buy a subsidised new car to a wider audience of potential buyers."

(PR/GK)