Scrappage Kicks in – UK sales improve in June

Yes, it’s been a horrible year for car makers. Sales down. Credit hard to deliver and buyers reluctant to commit to a new car until they see which way the land lies. But the Scrappage Scheme in the UK was brought in to try and give a lift to sales. And – to a degree – it is working.

The sales figures for June sales have just been released, and the decline in sales is the lowest for a year – down 15.7%. And it’s the Eco cars that are the big winners. Ford was top of the heap with 29,803 sales. The Ford Fiesta came out in first place with 9,822 sales (well deserved – see our review of the Fiesta ECOnetic), with the Ford Focus in second and the Vauxhall Corsa in third. But the overall news for Vauxhall was not great, with sales down 34.5% – more than twice the market decline.

As we expected, Hyundai have capitalised on the Scrappage Scheme, and have posted an increase of over 90% year on year, with sales of 5,265 cars. Alfa Romeo also performed well (due to the strong performance a car we rated highly in our review – the Alfa Romeo MiTo) and other ‘Budget’ car makers – such as Kia – had a strong showing.

These figures do show that the Scrappage scheme is having an effect. But it may be only temporary. Partly because the Scrappage Scheme has a very finite life, but also because the scheme has skewed the market by bringing forward sales from people wanting to capitalise on the Scrappage incentives. That could mean that sales may well fall later in the year when the Scrappage incentives run out, or those persuaded in to a new car for the first time have all been sold to.

We’ll have to see, but for now at least there is a small light at the end of the tunnel for car makers.

UK Car Sales Figures for June 2009

(Click image for full-size version)

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