New car sales in the UK rose in August for the second successive month, helped by the scrappage scheme.
 
 
The number of new cars sold in the UK in August was 67,006, up six per cent over August last year, according to the Society of Motor Manufacturers and Traders. In July, UK car sales rose by 2.4 per cent, the first rise since April last year.
 
Total sales since the start of 2009 are still 21.5 percent lower than the same period last year, however, but the SMMT attributed the recent rise to the scrappage incentive scheme, worth £2,000 a car, which came into effect in May.
 
"The scrappage incentive scheme is having a positive impact but with consumer and business confidence still fragile, there remain significant risks ahead," said Paul Everitt, SMMT chief executive.
 
"It is essential that these early signs of recovery are sustained into 2010," he added.
 
September will be a key test for the industry when the new '59' number plates are introduced. August typically accounts for only around three percent of annual new car registrations, whereas September normally produces 17 percent of annual sales.
 
Motor industry representatives fear that once the £300 million set aside for the scheme by the government runs out, sales could dip again. The Retail Motor Industry Federation (RMIF) says the funds could be exhausted by the end of the year.
 
"The scheme has been highly successful, but with the retail economic climate still fragile, demand still growing, and an increase in VAT scheduled for 1 January 2010, an extension of the initiative is vital," said Sue Robinson, RMIF director.
 
 
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