July 7, 2009

Car scrappage scheme boost to British car sales

Britain’s motor industry could be on the road to recovery as the “car scrappage” scheme helps put the brakes on sliding sales.

New car sales fell 15.7% last month, but that was the smallest drop for almost a year according to the Society of Motor Manufacturers & Traders (SMMT).

Sales to private buyers rose 3.9%, the first increase since November 2007.

The SMMT said the “banger bonus”, which offers a £2,000 incentive to swap 10-year-old motors for new, was having a “positive impact” with 87,000 orders since its May launch.

SMMT chief executive Paul Everitt said: “We expect the pace of improvement tincrease in the coming months, but we can already see the industry making steady progress.” Under the scrappage scheme half the money is paid by the Government and the rest by the motor industry.

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