New car sales continue to rise for third month

Oct 6 2009 by Iain Laing, The Journal

THE motor industry's recovery from the recession is set to continue, according to new figures which will show an increase in new car sales in Britain.

Analysts expect new car registrations to have improved by around 10% in September – compared to the same month a year ago – as motorists continue to take advantage of the scrappage scheme, under which they receive a £2,000 discount on vehicles over 10 years old when they buy a new model.

The Society of Motor Manufacturers and Traders (SMMT) said it expected figures due to be published today to show the third monthly increase in a row after a rise of 6% in August and 2.4% in July.

The industry body said last week’s announcement by Business Secretary Lord Mandelson of an extension to the scheme from £300m to £400m was an “extremely important decision” that will give more consumers the chance to buy a new car.

It will also help counter the likely negative impacts of a return to the higher rate of VAT, said the SMMT.

The scrappage scheme has been a massive boost for Nissan, which cut 1,200 staff at its Washington plant at the start of the year following the dramatic fall in the UK car market, but has since taken on another 350 workers as the scrappage scheme boosted sales.