The car scrappage scheme seems to have been a resounding success if February's car registrations numbers are anything to go by. With the scheme due to come to an end on March 31st, it seems that plenty of people are still trying to participate in the scheme before the promise of extra cash towards a new car becomes just a distant memory.
The February numbers for new car registrations indicates a 26.4% rise in February 2010 compared to the same period last year, with 68,686 units being sold across the UK. The UK's car industry association SMMT said that the scrappage scheme could be credited with giving the beleaguered motor industry eight months worth of positive sales. That's pretty good going in the middle of the worst recession in decades and one that saw the motor trade battered by factory closures, an economy that encouraged people to save money rather than spend it and saw job losses throughout the motoring industry.
But the scrappage scheme hasn't just benefited the UK motor trade; across Europe, other countries that have participated in the scheme have seen car registrations for new vehicles rise dramatically. Many people credit the scrappage scheme with keeping the motor industry going throughout the darkest days of the recession, and there are concerns that sales may drop dramatically once the scheme ends. This is reflected by Germany's figures - Germany ended their scrappage scheme in September 2009, and in February 2010 saw a 30% drop in the number of new car registrations. Foreign brands were particularly badly hit, falling by 45%. The worry is that the end of the scrappage scheme across Europe will effectively slam the door shut on new car sales at a time when the industry is still very vulnerable to the influences of a less than buoyant financial situation.
But in the meantime, reports from Spain confirm that the scrappage scheme has been a success. The Spanish car maker's association ANFAC released their February figures, showing a massive 47% rise in the registration of new vehicles, with sales figures of 91,281 units. The Italian market benefited from a 25.75% increase, while France saw sales increase in the same monthly period by 17.8% year on year.
There is no doubt that the scrappage scheme has been a huge success, stabilising the motor industry across Europe and seeing it through one of the darkest financial periods in modern history. It has also done its bit for environmental concerns, removing older cars from the road and replacing them with new, more efficient ones with lower emissions and greater fuel economy figures. It has also kept people in jobs, not just in the motor industry but in the service sector that supplies the motor trade with parts. The scheme has been heavily promoted and thousands of customers have taken up the opportunity to replace their old cars with newer ones at a much cheaper price.
But what does the future hold for a motor industry without the benefit of the scrappage scheme to hold on to? The figures from Germany are worrying the motor trade, as they voice concerns that the eight months of growth will be replaced by a sudden stop in new car registrations during April and May. While the scheme has given the industry a little bit of ‘breathing space', there could be much tougher times ahead for the motor trade, as customer numbers drop dramatically.