UK Runs Out of Scrappage Money

The British government has been asked to extend the money used for the scrappage scheme as the funds are close to be exhausted. Consultants at Deloitte have already requested the country's officials to provide more funds as soon as possible, just-auto.com wrote today. According to company officials, the scheme would need around 300 million pounds (326 million euros) or an extension to June 2010.

"As it looks increasingly likely that the scrappage scheme will end next week, declining car production figures for August highlight the importance of an extension to the scheme," David Raistrick, UK Manufacturing Leader at Deloitte, was quoted as saying by the aforementioned source.

"This is the wrong time for the industry to lose the support of scrappage which has without doubt boosted car registration figures and helped production figures. To avoid consumer confusion any extension needs to be announced in the next week or two."

According to official figures, no less than 67,006 cars have been delivered in August through the scheme. Ford Focus and Ford Fiesta are the best selling models in the programme, with the US-based manufacturer even deciding to boost production in the country to cope with increasing demand. Hyundai recorded a strong growth as well, with i10 and i20 attracting several thousands of buyers in the scrappage scheme.

"The scheme has also encouraged consumers to purchase smaller, more environmentally friendly cars and has been good for the entire automotive industry. Given how the scheme has been set up, the Government is able to fully recover their contribution through additional VAT and other tax revenues raised," Raistrick concluded.