Scrapping Scheme Slows UK's Car Industry Collapse

The United Kingdom car production decline has been slowed down by the scrapping incentives offered by the government, the Society of Motor Manufacturers and Traders is claiming. Still, the figures are well behind those recorded last year, with SMMT saying that UK manufacturers produced 107,635 vehicles in July and 518,375 in the first seven months of the year, which represents a 45.8 percent decline compared to the same period a year ago.

"The slowdown in the rate of decline of U.K. car production reflects the impact of the scrappage incentive schemes in place across Europe," SMMT CEO Paul Everitt said. "The U.K. motor industry is starting to stabilize but remains fragile."

Last week, UK officials revealed that approximately 150,000 cars have been sold through the country's very own scrapping campaign.

"I'm pleased that we have already achieved over 150,000 new car orders," Business Secretary Peter Mandelson was quoted as saying by the aforementioned source. "This is a great deal for manufacturers and dealers, not to mention the customers."

Ford and Hyundai are the two companies that are benefitting the most from the scrapping campaign as their small displacement models proved to be quite attractive for people looking for green models.

"The scrappage incentive scheme is working well and has encouraged a lot more people back into showrooms," said in July SMMT chief executive Paul Everitt. "In the coming months, we will see an increase in the rate of deliveries and this will confirm further progress on the industry's long road to recovery."

"The true impact of the vehicle scrappage scheme will be felt over the next few months, as the volume of orders made via the scheme are processed and consumers receive their cars," said Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), representing the UK's car dealers.