SMMT chief executive Paul Everitt believes a decisive election result and no new taxes could help prevent a drastic drop in the UK’s new car sales in 2010.
Everitt told Autocar that a successful football world cup campaign for England this summer could also provide a timely boost to sales once scrappage money has ran out.
This morning, the government confirmed that scrappage would be extended until the end of March and Everitt believes this will help sustain new car sales into the summer.
“We know what’s going to happening with sales in the first five or six months this year as there will be sales and deliveries from scrappage still to make” he told Autocar. “The second half of the year is more difficult to predict as we won’t have scrappage anymore.”
New car sales rose for the seventh consecutive month in January. Scrappage sales accounted for around one in five new cars sold last month. Despite its continued success, Everitt believes its withdrawal is beneficial for the market in the long term.
“The incentive has been useful in difficult times, but we need to make sure the market doesn’t become reliant on it,” he said. “That is not good in the long term.
“We were pushing for a gradual withdrawal of the scheme and this way ensures most of the money gets used. We’ve seen from the figures scrappage sales are slowing anyway and this extension is a much better way of ensuring the market doesn’t suffer.”
Everitt hopes there will be incentives for the fleet, business and commercial sectors in next month’s budget as these sectors have had limited benefit from scrappage.
The SMMT is currently predicting 1.82 million cars will be sold in the UK this year, nine per cent lower than in 2009.
“A strong performance from England at the world cup, a decisive election result and no new taxes will allow us to better our predictions this year,” said Everitt.