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UK New-Car Market Up 11.5 Percent in April

New-car sales in the United Kingdom rose 11.5 percent in April 2010 compared to April 2009. The market continued to grow for a 10th consecutive month fueled by cheaper credit and an improved economy.

Industry body the Society of Motor Manufacturers and Traders Ltd., which recently raised its full-year sales forecasts, said growth was driven by the private sector and by stronger demand for fuel-efficient vehicles.

However, April's rise was much smaller than the 26.6 percent rise registered in March and the 26.4 percent gain in February. Perspectives are not very optimistic for the following months, because of the sales tax's increase at the start of this year and the end of the government subsidy program that encouraged owners of older vehicles to trade them in for new, more fuel-efficient ones.

"With the car scrappage scheme now at an end and with VAT having risen back up from 15.0 percent to 17.5 percent at the beginning of January, there is a very real danger that private car sales will fall back markedly over the coming months," Howard Archer from automotive industry analysis provider Global Insight was quoted as saying by the Automotive News Europe.

Cars bought under the government's scrappage scheme made up just 8.0 percent of sales last month, while UK-built models outpaced the market, growing by 25.5 percent, according to the data, which was released by the SMMT.

"April was another good month for the UK motor industry with private buyers responding positively, despite the end of the scrappage scheme," SMMT CEO Paul Everitt said in a statement, quoted by the Automotive News Europe.

The Ford Fiesta was the UK's top-selling car in April and leads the Ford Focus 42,610 to 34,256 sales after four months, SMMT data shows.
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