New '59' plates push car sales up 11.4%

Tuesday, 06 October 2009 11:04

New car registrations rose 11.4 per cent in September as new number plates and the car scrappage scheme pushed forward growth.

Data from the Society of Motor Manufacturers and Traders (SMMT) reveal September saw car sales hitting 367,929.

Demand from private buyers rose 41.3 per cent, with buyers looking firmly at small cars.

Demand for 'minis' rose 195 per cent and the supermini segment rose 21.2 per cent.

The biggest seller was the Ford Fiesta, followed by the Vauxhall Corsa, the Ford Focus, the Vauxhall Astra and the VW Golf.

Sales of alternative fuelled vehicles were up 45.5 per cent.

Paul Everitt, SMMT chief executive, said: "Market conditions remain challenging with demand being underpinned by the extremely successful scrappage incentive scheme."

Last week, business secretary Peter Mandelson extended the scrappage scheme to cover 400,000 vehicles.

Since the scheme started in May, a total of 238,671 cars have been scrapped.

At the current rate, the scheme will now run out of funding at the end of the year.

The industry had hoped the discounts would run into 2010 so the scheme would still be running once VAT is increased back up to 17.5 per cent from the current reduced rate of 15 per cent.

"The scrappage scheme has now been extended by 100,000 extra units which should further assist UK new car sales through to the year end however we need to be cautious when looking towards prospects for 2010," said Keith Parry, head of motor retail at Barclays Commercial Bank.

"The ending of the scrappage scheme in February at the latest and the VAT increase at the start of the year could leave the sector without any support at a time when there are likely to be increasing pressures on consumer spending on big ticket items."

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