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
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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.

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.

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.

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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.

According to Government statistics, 1 in 5 car sales had been purchased through the Car Scrappage Scheme since commencement on May 18th 2009, which was acknowledged as an encouraging sign by Paul Everitt, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT). “With the scrappage incentive scheme fully operational, the industry is optimistic about the positive impact this will have on the market and on UK production facilities,” declared CEO Everitt, who also added “Despite the current difficulties, the UK must prepare for the return of global growth and government support for the industry is an essential part of the process”. Despite the initial increase in car sales, it will only be in July 2009 when June’s sales figures are released, that the industry could draw a full conclusion as to how effective the Car Scrappage Scheme is having on the UK car industry.

However, Nikki Rooke SMMT’s Head of Communications expressed concerns of emerging issues regarding difficulties in obtaining finance loans for the new car purchase, which was probably being influenced by the global credit crunch problems.

Anxiety continues to spread as U.S. car manufacturing General Motors’ announced that it may declare chapter 11 bankruptcy. Worries are escalating at UK manufacturer Vauxhall Motors, a GM subsidiary, as around 5,000 jobs are now at risk. Rumours are rife about the fate of Vauxhall’s plants in both Ellesmere Port and Luton. However, a deal has now been concluded in Germany where Canadian auto parts maker Magna will take over Opel, another European GM business, which secures tens of thousands of jobs. German Finance Minister Peer Steinbrueck told reporters that the takeover will be financed by a Russian bank in conjunction with Russian automaker GAZ.

We have previously highlighted on CarScrappage.co.uk that despite the entrepreneurial skills shown by car dealerships as they began creating their own scrappage deals while the Government procrastinated, it was essential the UK motor industry received the full support from a diligent Government. One of the main concerns now is whether the Government’s support may fatally prove too little and too late.

Check out Vauxhall deals at http://www.carscrappage.co.uk/car-scrappage-deals.