Cash for old bangers revs SME growth

Car sales were up by 26 per cent last month compared with February last year, largely due to the success of the government's car scrappage scheme, says the Society of Motor Manufacturers and Traders (SMMT).

Paul Everitt, chief executive of the SMMT, says: ‘Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme’s closure later this month.’

Jonathan Visscher, at the SMMT, says the scheme has boosted the small business sector: ‘The wider knock-on effect of its success is that many smaller companies in the supply chain have seen an increase in sales. However, when the scheme ends in March the boost will fade and by the close of the year we expect the industry to be down.’

David Lacey, managing director of The Fleet Department, adds: ‘Without doubt it has benefited all concerned. The government has made more VAT on its sales, the motor industry has achieved sales at a difficult time and also small manufacturing businesses have benefited.’

The scheme, which pays motorists £2,000 to trade in an old car for a new one, accounted for almost one in five car sales in February.

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