UK Extends Scrappage Scheme Until End of March

Car manufacturers who operate in the UK can be nothing but pleased with the government's decision to extend the country's scrappage schem by adding an extra month and pushing the deadline well into March. Until now, the scheme has proved to be very lucrative, as some 330,000 new vehicles have been sold.

"Against the background of the economic downturn the Scrappage Scheme has proved a great success, driving U.K. car sales, protecting jobs and supporting the supply chain for car manufacture at a time when this sector needed it most," UK business secretary Peter Mandelson said in a statement cited by the Wall Street Journal.

"If you're considering buying a new car, you should place your order as soon as possible to avoid disappointment, because the budget is strictly limited."

Until now, the UK has pumped about 400 million pounds in the scheme since May last year, setting the limit of vehicles to be sold to 400,000. Now, there are about 70,000 left. Customers who choose to buy a new car through the program benefit from a 2,000 pounds discount on the price of the new vehicle.

"Scrappage accounted for 17.8 percent of January new car registrations, the lowest percentage since the first full month of the scheme. With funding for over 60,000 vehicles still available, we welcome last week’s announcement by government to delay the scrappage close date into March," SMMT chief executive Paul Everitt said.

Scrappage continues to provide an important stimulus to the new car market, although the decreasing reliance on the scheme to deliver market growth is encouraging news for post-scrappage stability.