Scrappage scheme again boosts car sales and production

The Society upgraded its forecast by 100,000 units since the last quarterly revision in July and now believes registrations for the year will reach 1,928,100 – still 9.6% down on the previous year, with a further decline, to 1,777,100, expected in 2010. Pre scrappage the lowest forecast for the 2009 market was 1,658,000 units For vans, however, SMMT said the outlook remained challenging for vans, declining by 37% to 182,800 for the year. The government will be hoping that the new scrappage terms that allow van owners looking to trade in their vehicles to scrap their 8-year-old van instead of the previous 10-year requirement, will help stabilize this market. The age qualification for car owners now extends the benefits to cars registered on or before 29 February 2000 (V registration). The new terms have been underpinned by an extra £100 million of government funding, but business secretary Lord Mandelson said the scheme had to end in February 2010 or when the funding runs out, whichever is sooner. Meanwhile, new UK vehicle production data published today (23 October) showed the rate of decline slowing to its lowest level in a year. SMMT chief executive Paul Everitt (pictured), said demand was clearly being underpinned by the scrappage incentive scheme and the extension to the scheme would ensure that demand continued into 2010. He went on: "The UK economy is slowly emerging from recession, but businesses remain reluctant to commit to large capital investments and this is reflected in low demand for commercial vehicles,"