Scrappage scheme boosts UK car sales in August

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Just as the cash for clunkers scheme in the US boosted car sales in August, so also in UK, the car scrappage (cash for bangers) scheme has caused raised sales. According to figures released by the Society of Motor Manufacturers and Traders (SMMT) August sales were 67,000 units, 6 per cent more than last year’s August along with a 2.4 per cent rise in July.

However, this does not mean that the downturn in the auto industry has ended in Britain. New car sales are still down 21.5 per cent for the first eight months of the year when compared with the same period in 2008. It is only when September sales figures come in at month end that we will know whether the upward trend is continuing or not.

The scheme in the UK offered customers £2,000, half from the government and half from the industry in order to lure customers into buying new cars. The government set aside £300 million for the scheme which is due to run till February 2010, unless the money runs out sooner. There is also the lurking danger that once the scheme is over, the downturn in the auto industry will continue.

Source: The Times