CAR DEALERS in Britain fear a collapse in sales when the current scrappage scheme comes to an end there. The fund set aside by the British government is due to run out in October.
The Society of Motor Manufacturers and Traders is concerned that if the scheme ends this autumn, car sales could plummet again, sending manufacturers into a new crisis.
The society’s chief executive, Paul Everitt, said: “There is a lot of concern over scrappage schemes overheating the market. We want to avoid a situation where everything comes to a grinding halt when they finish.”
Figures from the society, published today show how the scheme, introduced in May, has boosted moribund car sales.
Last month, 176,264 cars were sold, almost a tenth of which were under the scrappage scheme.
The total sales figure for June is 15.7 per cent down on the same month last year, but is still the lowest annual fall for almost a year. At the beginning of this year, sales showed a slump of more than a quarter compared to last year.
Smaller and cheaper cars are proving particularly popular under the scrappage scheme, which has now sold just under 30,000 cars.
Everitt said: “We think the worst is over. Life is still pretty tough, but we are moving in the right direction.”
He estimated the scheme had resulted in more than 100,000 orders and government funding was likely to run out in October, after new registrations are introduced in September – the most popular time of the year to buy a car.
Paul Newton, an automotive analyst for IHS Global Insight, said: “The ending of the incentive is bound to have a deadening effect on car sales. If it happens when the economy is starting to pick up, you’ve got it just right . . . But if the economy is still in the doldrums when the schemes end, there could be a very large drop off in sales.”
– GuardianNews Service