Scrappage Scheme Boosts June New Car Orders
The Society of Motor Manufacturers and Traders (SMMT) has said the UK Car Scrappage Scheme has begun to have a “positive impact” on the industry as the decline in new car sales slowed to its lowest rates for almost a year.
176,264 new cars were sold in June, 15% above the SMMT prediction of 153,000, and new car registrations were down 15.7% compared with the same month last year, a significant improvement on the 25% drop seen in May.
The top selling car in June was the Ford Fiesta, with the Focus second and Vauxhall claiming 3rd and 4th with the Corsa and Astra respectively.
Topping the list of cars sold through the scrappage scheme in June however is Hyundai who sold 3,042 cars, well in excess of Toyota (2,586), Ford (2,066) and Fiat (1,743).
29,796 vehicles have now been sold through the scrappage scheme since its inception on May 18th according to the SMMT, whilst government figures show that some 87,000 orders had been placed up to and including June 21st.
Top Selling Car for June - the Ford Fiesta
Notably, demand for small cars has shot up with the “mini” sector showing 145.4% growth over the year and in addition, “superminis” took a record 37.2% share of the market.
Ian Robertson, BMW Group MD commented: “From the first quarter to the second quarter of the year, there was a stabilisation of a negative trend” following the introduction of cheaper entry models into the scheme for both its BMW and Mini brands.
Hyundai’s UK MD Tony Whitehorn said that “scrappage customers” we generally going for small cars and were often their first brand new vehicle. Hyundai report that UK sales have almost doubled from the same month a year ago, thanks largely to the scheme.
The Department for Business, Innovation and Skills has pointed out that at the current rate, the scheme would be exhausted by the end of October, well in advance of the projected March 2010 end date.
Professor David Bailey, director of Coventry University Business School said that pressure would be on the government to extend the scheme, something which the Business Department is currently “adamant” won’t happen.
Bailey also noted that the car industry wouldn’t properly start to recover until wider confidence and the housing market picks up.