British scrappage scheme boosts sales

THE scrappage scheme operating in the United Kingdom is proving “hugely popular", accounting for almost 10 per cent of the 176,264 new passenger car registrations recorded in June, according to figures released this week.

While the total was 15.7 per cent down on June 2008, the UK’s peak automotive body, the Society of Motor Manufacturers and Traders (SMMT), recorded 17,337 new-vehicle registrations in June through the scrappage incentive scheme.

This included 323 vans, or 1.9 per cent of overall van registrations for the month.

The brands to benefit most the scheme were Hyundai (3042), Toyota (2586), Ford (2066), Fiat (1743), Nissan (1662), Kia (1321) and Suzuki (916).

Since the ‘cash for clunkers’ incentive began on May 18, the SMMT has recorded 29,796 vehicle registrations under the scheme.

This is below the 35,000 new-vehicle orders the British government last month claimed had been placed in the first six weeks after the scheme – which offers consumers a 2000 ($A4080) subsidy split evenly between the government and the manufacturer – was announced in the budget on April 22, although details are unavailable to ascertain the number of cars from this batch still to be delivered.

Nonetheless, the latest figures have given SMMT chief executive Paul Everitt reason to follow the government’s lead and hail the scheme a success.

“The scrappage incentive scheme is working well and has encouraged a lot more people back into showrooms,” Mr Everitt said. “In the coming months, we will see an increase in the rate of deliveries and this will confirm further progress on the industry’s long road to recovery.”

In contrast, the UK’s National Franchised Dealers Association (NFDA) was more circumspect, arguing that the true impact of the vehicle scrappage scheme would be felt over the coming months as the volume of orders are processed and consumers receive their cars.

“It can take up to two months for a new-car purchase to go from the initial order to the delivery to the customer, so most of the purchases made under the scrappage scheme have yet to translate into sales,” said NFDA director Sue Robinson. “We expect the full impact of the scheme to make itself felt from next month onwards.”

Year-to-date, the UK market is down 25.9 per cent.

Elsewhere in Europe, scrappage incentives in France, Spain and Italy were also deemed responsible for an improvement in sales last month.

French new-vehicle sales rose 7.1 per cent on June 2008 – with 20 per cent of the circa-200,000 total attributed to its scrappage scheme – while Italian sales climbed 12.4 per cent.

In Spain, overall sales fell 15.9 per cent last month compared to the corresponding month last year, although this was considered evidence of a recovery after sales fell 38.7 per cent in May.

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