Scrap boosts new car sales

NEW car sales in June fell at their slowest rate for nearly a year, the Society of Motor Manufacturers and Traders said yesterday, as it praised the government&rsquo;s scrappage scheme.<br /><br />The number of new cars sold in the UK last month totalled 176,264 &ndash; a 15.7 per cent drop on the June 2008 figure, according to the Society of Motor Manufacturers and Traders.<br /><br />Private buyer registrations were up 3.9 per cent last month compared to May 2009, the first rise in this sector since November 2007.<br />The global downturn has put the brakes on consumer spending on this sector over the last two years.<br /><br />The cash-for-bangers scheme, which business secretary Lord Mandelson introduced in May, accounted for around 10 per cent of last month&rsquo;s sales.<br /><br />Under the high profile scheme, car buyers get &pound;2,000 towards a new car if they scrap one more than 10 years old. Half of the scheme is government funded, and half comes from the car industry itself.<br /><br />The Society of Motor Manufacturers and Traders said 29,796 vehicles have been sold under the scrappage scheme since it was implemented. Government figures show 87,000 new car orders were placed up to 21 June. <br /><br />The scheme is set to run until March 2010, or until the allocated &pound;300m runs out.<br /><br />The news came as Ford said its year-on-year sales were up for the first time in 11 months.<br /><br />&ldquo;The scrappage effect has been less in the UK than Germany, where June sales are up 40 per cent on 2008,&rdquo; Ernst &amp; Young&rsquo;s Eric Wallbank said.<br /><br />&ldquo;However, the downside for the German market is they are expecting a second dip in sales when its scheme ends &ndash; if this happens in the UK it will be less severe,&rdquo; he added.<br /><br />In Germany, the scheme applies to cars over eight years old and the incentive is larger.