UK Scrappage Scheme Yields 372,401 New Car Registrations: SMMT

Society of Motor Manufacturers and Traders figures state that by 31 March, 372,401 new cars had been registered through the scrappage scheme, accounting for 12.2 per cent of all new car registrations in March. In addition, the scheme accounted for 3.2 per cent of the total van market in March, with 6,577 new LCVs registered through the scheme since it began in May 2009.

SMMT chief executive Paul Everitt said that the “scheme has provided a hugely important stimulus to the market and leaves industry in far better health than we saw in pre-scrappage 2009.” The issue of whether the Scrappage Incentive Scheme has provided an artificial lift, with a severe dip in sales to follow in the remainder of 2010 remains to be seen, though there SMMT provides some evidence to the contrary. The SIS accounted for just 12.2 per cent of all new car registrations in March, a reduction of around 8 per cent on the average monthly level, due to the scheme coming to an end in March. Since May 2009 the scheme has accounted for 18.7 per cent of total new car sales. For LCVs the figures are 3.2 per cent and 3.7 per cent respectively. These figures suggest that car registrations have a chance to remain high, as the dependence on the SIS has decreased recently. Additionally, one could argue that the SIS has helped dig the foundations for the trend of manufacturer-specific scrappage schemes.

It also appears that the mooted ecological benefits of replacing older vehicles have transpired, with average carbon dioxide emissions of a car bought through the scheme measuring 132.9g/km, 27.1 per cent below a scrapped car’s figure and 9.6 per cent below the overall new car market average. While these emissions benefits do not factor in the emissions related to the scrappage of the old car and the manufacture of the new, the lower emissions figures provide some evidence that initiatives such as this could have some green effect, as Everitt noted: “Consumers will also benefit from the improved fuel efficiency, the latest safety features and cleaner tailpipe emissions available from the new vehicles purchased through the scheme.”