Scrappage warning as car sales keep rising

NEW car registrations rose for the 11th consecutive month in May, but industry leaders have warned that total sales for 2010 will probably dip against last year after the UK government's car scrappage scheme came to an end.

The Society of Motor Manufacturers and Traders (SMMT) reported growth from fleet and private buyers, resulting in a 13.5 per cent jump in registrations. A total of 153,095 new cars were registered in the UK last month, compared with 134,858 in May 2009, the first month of the scrappage scheme.

SMMT chief executive Paul Everitt said: "May was another good month for the UK new car market, although we expect the coming months to be extremely challenging.

"It is essential that the upcoming emergency Budget promotes consumer and business confidence to maintain economic recovery."

Registrations of vans and heavy trucks – a market driven mainly by business activity – rose 25 per cent in May to 19,562. However, sales were down 15 per cent on a rolling 12-month basis, as increasing van registrations failed to offset the continued downward trend in trucks.

Everitt said: "Demand in both sectors is around 45 per cent below the pre-recession average. While vans are picking up slightly, heavy trucks are heading for a record low."

The UK government's scrappage scheme for cars closed to new orders in March of this year, with a final few scrappage registrations coming through last month. Since it started, the scheme has averaged 17 per cent of monthly car registrations.

The Ford Fiesta was ousted from its top ranking by a stablemate, the Ford Focus.