car: Car sales rise in Germany but fall in the UK

Germany:

New car registrations in Germany rose 40% year-on-year in May, with the country's scrappage scheme credited for the bulk of the rise. Sales increased to about 390,000 units compared with the same month last year.

In February, the German government launched a subsidy that pays motorists €2,500 (£2,160) to scrap cars at least nine years old if they buy a new model from any car maker in exchange. The German government has invest €5bn (£4.3 billion) in the scheme, which runs out at the end of this year.

In France, which also has a scrappage scheme, new car sales rose by 11.9% in May, to 206,387 units. France offers new car buyers a €1,000 (£864) subsidy for scrapping a 10-year-old car, as well as an additional €700 (£605) environmental bonus for buyers of cars with CO2 emissions below 120g/km.

However, the effect of scrapping incentives appears to be waning in Italy, where new car sales dropped 8.6% in May, to 188,670 units.

The May decline marked the second consecutive month in which sales have fallen despite scrapping incentives of up to €5,000 (£4,316), which were introduced last February.

UK:

UK car sales dropped by 24.8% in May compared to the same period last year, new industry figures show. This figure are very similar to the April figure of 24%.

The Society of Motor Manufacturers (SMMT), who issued the stats, said the market is looking more buoyant than it has done earlier in 2009 but warned it is too early to judge the effect of scrappage, which was introduced on 18th May. Many of these orders have not yet translated into registrations due to buyers waiting for their cars to be delivered.

The number of new cars sold in the UK during the month was 134,858, compared with 179,272 in May last year. Overall registrations in 2009 have been 748,691, a 27.9% drop on the first five months of 2008. Car sales have now fallen year-on-year for 13 consecutive months.

Paul Everitt, chief executive of the SMMT, said: “While consumer confidence is improving, the UK motor industry is still facing a difficult economic climate. We have seen an encouraging start to the scrappage incentive scheme with 35,000 orders being placed since it was announced, although it will take time to feed into registration figures.”

A survey by the Retail Motor Industry Federation (RMIF), the trade association for 8,000 motor retailers, found that 92.8% of dealers reported an increase in enquires on new cars following the announcement of the scheme. It also revealed that 67.3% of buyers taking advantage of the scheme are aged 45 to 60 and that 66.9% of the vehicles being bought under the scheme have 1.0 to 1.3 litre engines. The survey showed 48.5%of the vehicles being bought under the scheme are priced between £6,000 and £8,000 and 22.1% are priced between £8,000 and £10,000.

RMIF Director Sue Robinson said: 'Car sales should see a significant increase in the coming months as a result of the vehicle scrappage scheme. This will go a long way towards helping to revive consumer confidence, and the UK car market, making it a double win for buyers and business alike.'

Hyundai says the scrappage scheme has been a resounding success with orders up 750% for the month. Tony Whitehorn, Hyundai UK's managing director, said: "It has certainly been an amazing month for us, but we could have sold even more cars if we could have got them. 'Our dealers have taken more than 9,000 orders in the past four weeks - that's almost a third of the total number of cars we sold in all of 2008, and a massive 750% increase in the number we'd normally expect to sell in a month. The most popular models are the i10, i20 and i30. Cars being scrapped in exchange for an i10 include a Range Rover, Mercedes S500 and several Jaguars.

Meanwhile, Honda has completed the build of the first Civic to be made at its Swindon factory since it reopened earlier this week. The Swindon plant will take on production of the Jazz, which has previously only been made in Japan and China.

Top ten sellers in May:

Ford Fiesta – 7,040.

Ford Focus – 6,693.

Vauxhall Corsa – 5,525.

Volkswagen Golf – 3,961.

Vauxhall Astra – 3,549.

Peugeot 207 – 3,103.

Mini Cooper – 2,650.

Ford Mondeo – 2,647.

Nissan Qashqai – 2,629.

Vauxhall Insignia – 2,602

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