Scrappage again spurs car sales

September, traditionally a large volume month due to the number plate change, will be the biggest month of 2009 for new car registrations as consumers continue to take advantage of the scrappage scheme. In the month, one in five or 77,316 new cars were registered using the scheme, taking the tally since its start in May to 178,278. In the commercial vehicle sector, a total of 2,839 vans have been registered since the scheme began and 1,023 in September, accounting for 3.6% of overall van registrations in September. SMMT chief executive Paul Everitt said the scheme was providing the foundation for recovery in new car registrations but there was still a long way to go. "The recently announced extension will allow for a further 100,000 vehicles and the new criteria will open the scheme up to more consumers, allowing time for the market to stabilise as the economy gradually improves," he said. David Raistrick, UK manufacturing leader at Deloitte said the 11.4% increase marked the third consecutive month of growth in new car registration figures. The rise exceeded market expectations and was a much more promising increase than the previous two months' 6% and 2.7% rises, giving hope that the industry is on the slow road to recovery. He went on: "Reports suggest that scrappage currently accounts for almost 25% of new car sales and this has no doubt added to September's increased registration figures. It is a relief for the industry that the scheme has been extended. The extension of an extra 100,000 vehicles will hopefully maintain the momentum that the automotive sector needs to achieve a long lasting recovery." Sue Robinson, director of the Retail Motor Industry Federation (RMI) added: "Car dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers.The scheme has been highly successful, and with an extension in place, we expect demand to continue for the latter part of the year." However, not everyone was so welcoming of the scheme. ACFO, which represents car and van fleet operators said the latest figures demonstrated that its worst fears were being realised because they revealed a "massive decline in the sale of new cars and vans to businesses this year". It said the "much-hyped" scrappage scheme has failed to help Britain's businesses which were traditionally responsible for buying at least 60% of all new cars sold and almost all vans. ACFO director Stewart Whyte said: "The scrappage scheme was launched in haste and amid much lobbying from the motor manufacturers and retailers. But it has helped only one sector of the marketplace - private buyers who are in the minority when it comes to buying vehicles. The scheme has done absolutely nothing to encourage businesses to renew their company cars and vans." ACFO wanted to see: • A scrappage scheme apply to new and used cars up to four-years-old • Used vehicles to be Euro4 compliant m, linked to one of the current VED or corporation tax thresholds for clarity, simplicity and administrative ease • A sliding scale of scrappage scheme payments linked to the age of the vehicle being purchased • Priority to replacing many older Government-operated units as 'real' sales • Scheme in place for a pre-determined period of time, for example 18 months