New car sales in Britain jumped 26.4 per cent in February from a year earlier, the Society of Motor Manufacturers and Traders (SMMT) said today, but it forecast demand would tail off after a car scrappage scheme ends next month.
It said it expects new car sales to fall 10 per cent this year.
New car sales in February totalled 68,686 vehicles, boosted for an eighth consecutive month by the scrappage programme introduced by the government last year, which gives drivers £2,000 to trade in cars more than 10 years old against a new, more fuel-efficient model.
SMMT said cars bought under the scheme accounted for almost 20 per cent of total sales.
"We expect its benefits to stretch beyond the scheme's closure later this month," said SMMT chief executive, Paul Everitt.
However, SMMT said the impact would diminish in the second quarter and that sales were likely to start falling in the second half of this year as the economic outlook remained uncertain.
A survey earlier this week suggested consumers are becoming more reluctant to make major purchases amid ongoing worries about the jobs market and muted wage growth.
Analysts said Britons' concerns about future government action to curb spending may also dent the car market.
Reuters