The UK car scrapping scheme seems to be working, giving a much-needed boost in the industry. The latest figures show car registrations were 7% higher in June than in May (when accounting for seasonal adjustments), and, according to the SMMT, almost 10% of new car registrations were as a result of the scrappage scheme.
Government figures show that within a month of introducing the scheme, almost a fifth of government money has already been spent, raising concerns that the scheme will be exhausted before its proposed closing date in March.
For now, the scheme is helping the beleaguered automotive industry. But it remains to be seen if higher demand will be sustained once the stimulus is removed. Until consumer confidence picks up a sustained recovery seems unlikely.