LONDON (ShareCast) - New car registrations fell at the lowest rate in nearly a year in June as a government scheme to subsidise car purchases began to boost sales, new figures from the Society of Motor Manufacturers and Traders (SMMT) said.
The
number of car registrations fell by 15.7% in June to 176,264, a fall of 15.7% since June which is the slowest rate of decline since July last year.
"We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations," said SMMT chief executive Paul Everitt.
Under the government's 'car scrappage' scheme, motorists with cars more than 10 years old receive £2,000 if they replace their vehicles with new ones, with the government and the car dealer contributing £1,000 each.
Everitt continued: "SMMT expects the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery."
The SMMT said demand for small cars picked up, with the Ford Fiesta the best-selling model.
Howard Archer, chief UK and European economist at the analysts Global Insight, said it was difficult to determine how far the scrappage scheme was benefitting the overall economy given that it could be diverting consumer spending from other areas of the economy.
"The net boost to the UK economy will depend to what extent the vehicle scrappage scheme lifts overall consumer spending," he said.
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