Jury still out on cash for bangers

The Government’s cash for bangers scrappage scheme is having little impact on overall new-car sales, according to the Society of Motor Manufacturers and Traders (SMMT).

The only good news, a 50% increase in the number of small cars sold, could not disguise that May sales fell by 25% - to 134,858 - compared with 12 months ago.

This unlucky 13th consecutive monthly drop added up to a fall of 30% for the first five months of this year compared with the same period last year.

The £300 million scrappage scheme, introduced on May 18, pays a £2,000 bonus to owners of cars and small vans more than 10 years old when they trade them in for brand-new models.

Says SMMT boss Paul Everitt: "While consumer confidence is improving, the UK motor industry is still facing a difficult economic climate."

"We have seen an encouraging start to the scrappage incentive scheme with 35,000 orders being placed since it was announced, but this will take time to feed into registration figures."

Besides the small-car boost, sales of diesel vehicles are moderately encouraging, while private sales fell by only 13.8%.

Copyright © Press Association 2009

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