60,000 drivers take up scrappage offer

MORE than 60,000 orders for new cars have been made under the government&rsquo;s scrappage scheme, in a rare piece of positive news for the struggling sector.<br /><br />The drive to encourage spending on motors, which began in May, offers consumers &pound;2,000 on cars over 10 years old. Half of the incentive money is supplied by the government, and half by the car maker.<br /><br />&ldquo;It&rsquo;s very encouraging to see so many people have taken up orders,&rdquo; a spokesman for the Society of Motor Manufacturers and Traders (SMMT) said. &ldquo;It&rsquo;s a big number, and we&rsquo;ll see it trickle down into new car purchases soon.&rdquo;<br /><br />&ldquo;Consumers know a good deal when they see one. These figures speak for themselves,&rdquo; said business secretary Lord Mandelson.<br /><br />Of the 38 companies involved, Korean carmaker Kia and Ford have received the most orders, with 7,000 and 7,500 trade-ins made respectively. At Kia, the budget-range Picanto accounted for 60 per cent of orders, and the family-sized Rio 35 per cent.<br /><br />&ldquo;We&rsquo;re reaping the rewards, as most people looking at scrappage are looking at smaller cars,&rdquo; a spokesman for Kia said.<br /><br />The spokesman added: &ldquo;Those who want to trade in are used to having older cars, and are on a budget.&rdquo;<br /><br />But high-end manufacturers such as Jaguar have seen little improvement in their sales from the scheme.<br /><br />&ldquo;We&rsquo;ve had a handful of orders,&rdquo; a Jaguar spokesman said, &ldquo;but the incentive won&rsquo;t help the high end market.&rdquo;<br /><br />The cash-for-bangers project will run until March 2010, or until the allocated &pound;300m runs out.<br /><br />Mandelson&rsquo;s scheme stalled at the starting line in May, when carmakers including Ford, Vauxhall and Honda told dealers not to register new vehicles as they sought to clarify complex tax arrangements, and asked for dealerships, not just manufacturers, to foot some of the bill.<br /><br />New car registration figures for May disappointed, falling 24.8 per cent to 134,858 units, the 13th consecutive monthly drop in volumes, despite the introduction of the scrappage scheme.<br /><br />The SMMT said it would take time for the scheme to feed into registration figures.