7% rise in new car sales 'better than expected' say traders

NEW car sales in Scotland bounced back by nearly 76 per cent last month on a year ago, when registrations were hit by the economic downturn.

A total of 7,442 new cars were sold in December, with the Scottish Motor Trade Association (SMTA) attributing the increase to the scrappage scheme and buyers seeking to beat the 2.5 per cent VAT increase. Annual sales last year were up by 7 per cent.

However, SMTA chief executive Douglas Robertson said: "Bearing in mind that the scrappage scheme is due to end in February, I would not anticipate 2010 being anything other than another difficult year."

Since its introduction in May the scrappage scheme has accounted for more than a fifth of all new registrations and is reckoned to have represented more than 20 per cent of the December 2009 market.

While sales dipped nearly 26 per cent in the first half of last year, they rose 21 per cent between June and December 2009.

Last month was the third best December on record and the highest since 2005.

But last year was nevertheless the first since 1995 to see the total number of new registrations dip below the two million mark.

A business department spokesman for the SMMT said: "Today's figures show that the government's scrappage scheme has been achieving its aim to provide a short-term boost for the industry and stimulate consumer demand. It is good news for the industry that sales have been higher than originally predicted."