So far some 330,000 have been ordered under the scheme. However, with a limit of 400,000 vehicles which can be scrapped, a further 70,000 people could still take advantage of the deal.

The Government have said that manufacturers had requested the extension until the end of March 2010 to allow them to prepare for the exit phase. However, there will be no additional financing for the scheme, which is funded by the Government and 38 car manufacturers.

Mandelson said: “Against the background of the economic downturn the scrappage scheme has proved a great success, driving UK car sales, protecting jobs and supporting the supply chain manufacture at a time when this sector needed it most.”

The Society of Motor Manufacturers and Traders (SMMT) says the scheme has accounted for a fifth of new car sales since it was introduced, but warns of a tough year once it ends.

The Ford Focus - Car Scrappage Scheme Big Winner

August Car Sales – The Best Sellers
1  Ford Focus 4,366
2  Ford Fiesta 2,968
3  Hyundai i10 2,431
4  Vauxhall Corsa 2,031
5  Volkswagen Golf 1,832
6  Peugeot 207 1,558
7  BMW 3 Series 1,482
8  Vauxhall Astra 1,355
9  Vauxhall Insignia 1,334
10 Toyota Yaris 1,331
Source: SMMT
-

The Society of Motor Manufacturers and Traders (SMMT) stated there was a clear link between the Car Scrappage Scheme and sales increase with the smaller fuel-efficient models benefitting the most.

However, despite displaying resilient and determined chararcteristics, total car sales since the beginning of 2009 are still down by 21.5% compared to the same period for 2008. This demonstrates the severity of the recession and also provides an indication of how low car sales would have been if the Car Scrappage Scheme had not been launched.

“The scrappage incentive scheme is having a positive impact but with consumer and business confidence still fragile, there remain significant risks ahead,” commented SMMT Chief Executive Paul Everitt, who also added “It is essential that these early signs of recovery are sustained into 2010,” he added.

Compare and contrast the month of August, which typically accounts for nearly 3.3% of annual new car registrations, whereas September typically takes up to 17% of new sales. Based on these historical sales figures, September will provide a key test and indicator for the motor industry’s future when the new ‘59′ number plates are introduced.

The EEF has recently issued a letter to the Chancellor Alistair Darling claiming the Car Scrappage Scheme had helped reduce the fall in UK car production while retaining skilled jobs. Director of policy, Steve Radley confirmed; “The success of the Car Scrappage Scheme has been clear for all to see by putting a floor under manufacturing recession and helping retain skilled employees.”

However, a caveat was also included – as the EEF stated it was uncertain consumers would continue with their demand for new cars if such scrappage incentives were to cease. It further added; “It is by no means certain that this positive trend will continue in the near future with consumer confidence still fragile and unemployment still rising. Failure to extend the (Car Scrappage) scheme before a stronger recovery is in place runs the risk of pulling the rug from under the sector, damaging supply chains and prospects for a better balanced economy in the upturn.”

As recently reported by the Car Scrappage Team, the Society of Motor Manufacturers and Traders (SMMT) has also called on the Government to extend the scrappage scheme. The SMMT was quoted last month as stating the £300m scheme fund was likely to run out by the end of October and has therefore called on the Government for an extension to February 2010. But a more startlingly estimation has been offered Deloitte, which claims the scrappage scheme fund could be all-but-gone within the next week.

Mandelson - No Promises

“If the scheme ends in October and is followed by a 2% increase in VAT in January it will be a serious blow to the British car industry that’s just getting back on its feet.” warns Paul Everitt, CEO – SMMT.

Executives from the motor industry met with Business Secretary Lord Mandelson last week and called for an extension to the Car Scrappage Scheme by increasing the Government provided subsidy by a further £200m. The initial Government sum which kick started the Scrappage Scheme in May was £300m and is forecast to run out in October.

The industry is warning that failure to provide further subsidy may result in workforces being forced back on to shorter working weeks with job security at risk.

Paul Everitt, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) was quoted to have said “Without an extension there’s a real risk of an abrupt slump in sales that will create further uncertainty for thousands of car workers with the likelihood of short-time working.”

A Department of Business spokesman confirmed a meeting was to take place, but said there were no plans to extend the Car Scrappage Scheme.

Since the Car Scrappage Scheme was launched in April 2009 around 200,000 new cars have been bought, which has helped to sustain employment within and connected to the motor industry.

The Ford Fiesta - The Big Seller

New car sales in July rose year on year for the first time in 15 months as the Government’s Car Scrappage Scheme encouraged more buyers back into dealerships. Registrations rose 2.4%, the first rise since April 2008 and the Society of Motor Manufacturers and Traders (SMMT) were quick to declare the car scrappage scheme as being the key driver, noting 21% of last month’s registrations were the result of the plan.

Chief Executive Paul Everitt 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 2008”.

The Ford Fiesta was the biggest seller, continuing the trend of most people taking advantage buying smaller cars because they are cheaper. Registrations of mini segment cars more than trebled in July whilst super-minis saw a 15.7% rise.

Whilst the scheme is only to run until March 2010, or until its £300m budget is used up, lobby groups are calling for the scheme to be extended, noting that the program was earning as much in tax for the government as it was costing them in subsidies.

Similarly in Europe, calls are being made for extensions or for the schemes to be phased out slowly when many run out later this year. The €6bn German plan is expected to run out of cash in September 2009.

The BMW Mini - Major Sales

Year-on-year new car registrations fell by nearly 16% in June, compared to the 25% fall in May. However, the Car Scrappage Scheme has started to have a positive affect on the UK motor industry with this fall in sales being the smallest since July 2008.  

The Society of Motor Manufacturers and Traders (SMMT) confirmed 176,264 units (cars and vans) were sold in June, with the Scrappage Scheme, which commenced on 18 May, accounting for approximately 10% of these sales.

Interestingly, private buyer registrations increased 3.9% year-on-year – recording the first rise since November 2007.

The SMMT also confirmed 29,796 vehicles had been sold under the Car Scrappage Scheme since commencement, while Government statistics state that c.87,000 orders had been placed up to 21 June 2009.

As predicted by the Car Scrappage Team, buyers have used the Scrappage Scheme to purchase the smaller, fuel efficient cars, with the “mini” market achieving 145.4% growth over the year and the “super-mini’s” making a record 37.2% share of this market.

Having initially planned for the scheme to last until March 2010, the Department for Business, Innovation and Skills stated that the Scrappage Scheme would effectively be exhausted by the end of October based on the current buying rate.

Industry experts and car dealers have petitioned the Government to extend the scheme as has been done in Germany. However, at present the Government department has no plans to extend it.

Topping the Scrappage Table - the Hyundai i10

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.

Hyundai stated that its new orders for the period April 23 to June 7 amounted to 8,246, which put the South Korean based manufacturer at the top of the list of the 15 car companies involved in Reuters’ survey.

Leading the way for Hyundai is its entry level i10 model, which is available for under £5,000 with the scrappage discount.

i10 - biggest selling model

All but one of the companies polled claimed that consumers were showing interest in cheaper and more fuel efficient cars, a trend which was back up by the UK’s Society of Motor Manufacturers and Traders (SMTT) who note that since the various scrappage schemes have been implemented across Europe “there’s a tendency to buy smaller cars.”

The SMTT spokesperson noted that the trend was most likely due to a combination of lower CO2 emissions, better mpg and the lower price of these smaller models.

In second place behind Hyundai were Ford, who have 8,050 new car orders for the period, with Toyota just behind with an estimated 7,800 vehicle orders.

The Car Scrappage Team previously published statistics based on their own Scrappage survey reporting consumers were utilising the Scrappage Scheme to pursue the fuel efficient economy end of the market.

Ford Focus zooms to No. 2

New car sales data published for May shows a shift towards the £10k or less tranche of the market in comparison to sales in April.

The Ford Fiesta, available at under £8k thanks to a £2,500 scrappage discount, topped the list for the Month of May, pushing the slightly more expensive Ford Focus down to 2nd place, which with a £4,000 reduction currently retails at under £10k.

Whilst the relatively inexpensive Corsa, Golf and Astra continue to occupy positions 3 to 5 respectively, the equally economical Peugeot 207 now resides at 6th in the table, one place up from April.

Top 10 Selling New Cars for May ‘09
May sales figures in brackets ()

1 Ford Fiesta – (7,040) around £9,795
2 Ford Focus – (6,693) around £12,295
3 Vauxhall Corsa – (5,525) around £10,000
4 Volkswagen Golf – (3,961) around £13,585
5 Vauxhall Astra – (3,549) around £14,865
6 Peugeot 207 – (3,103) around £8,740
7 BMW MINI – (2,650) Mini Cooper OTR Price around £13,715
8 Ford Mondeo – (2,647) around £12,895
9 Nissan Qashqai (2,629) around £12,200
10 Vauxhall Insignia – (2,602) around £17,130

Source: SMMT. *OTR = On-the-road. Above prices may vary so check details and finance with individual manufacturers and dealerships.

Fiesta Zetec - Small is popular!

Further proof of the flight towards the lower-cost market are the new arrivals into the top 10 of the BMW Mini and Nissan Qashqai, which have ousted the Audi A3 and Vauxhall Zafiri. Additionally, the Vauxhall Insignia which had been the 6th biggest new car seller in April now comes in at number 10 and despite a +£4k scrappage discount, currently retails above £13.5k.

New Arrival at No. 7 - BMW MINI

Outside of the top 10 Hyundai, who has made its i10 1.2 Classic available from under £5k, said sales in May rose 36.6% to 3,325 and new orders totalled 9,000. In an average month between 1,200 and 1,600 orders would be taken by the manufacturer.

And the top 10 for June is likely to reinforce this trend towards the less expensive end of the new car market as this will be the first full month in which the Car Scrappage Scheme has been in place.

-

Whilst the purchase price of a top 10 best selling new car averages £12,522, it is also worth considering the following rate of car sales per day. The SMMT released UK car sales for May 2009 showing a major fall of 24.8% to 134,858 compared to May ‘08. This equates to an average mean figure of 4,350 car sales per day, which at an average top 10 price of £12,522 gives a total UK car sales figure for May of over £54m per day. Still seems a big number for a recession hit Britain? And this figure does not take into account finance costs, insurance and road tax, which would have probably raised this overall estimate.

The Society of Motor Manufacturers and Traders (SMMT) have revealed UK car sales for May 2009 plunging 24.8% to 134,858 compared to May ‘08. Furthermore, this is the 13th consecutive monthly decline in new UK car sales. Since the 1st January 2009, UK vehicle sales have totalled 748,691, which is down 27.9% year on year.

Top of the Premiership - Fiesta Zetec

The Ford Fiesta notched up the highest sales figures in May of 7,040, closely followed by her big brother – the Ford Focus with 6,693.

The Car Scrappage Team will be analysing May’s sales figures in further detail tomorrow. We think you’ll find it makes interesting reading.

Paul Everitt, chief executive of the SMMT was quick to remind the industry that the month of June will most likely show the true and full picture regards new car sales, as the Car Scrappage Scheme only officially commenced on 18th May ‘09. And Everitt continued by saying “We have seen an encouraging start to the scrappage incentive scheme with 35,000 orders being placed since it was announced, although it will take time to feed into registration figures”.

The Car Scrappage Team was one of the first media sources to report certain manufacturers and UK dealerships setting up their own scrappage schemes prior the official commencement. Moreover, some continue to demonstrate their entrepreneurial skills and fighting spirit by creating their own, highly incentivised initiatives, which are over and above the Government’s scheme.

Full Premiership sales, stats and analysis tomorrow.