Relief at February sales
March 4th, 2010 by Richard Aucock
STRONG February new car sales have been boosted by the extension to the scrappage scheme say dealers.
The RMIF says the decision to extend the scheme into March, coupled with last year’s extra funds for the scheme, means sustained demand has benefited showroom traffic.
Scrappage sales accounted for more than 19 percent of sales in February, with March expected to continue growth.
This means Q1 car dealer performance will be very strong for dealers, says RMI director Sue Robinson.
Dealers will also be able to better manage scrappage rundown thanks to the extension – giving them time to gear up for the post-scrappage market.
‘Scrappage continues to give a boost to the market with private buyers in particular returning to the showrooms,’ said Robinson.
‘The scrappage scheme has tempted private buyers back into the new and used car market.
‘However, the business market is still fragile with many fleet and business operators delaying the replacement of vehicles, though the beginning of 2010 has seen some positive signs in this sector with the fleet market up 17 per cent.’
It is hoped stronger fleet sales will help compensate for the loss of scrappage, and car dealers have been advised to prioritise this area in 2010.
‘The continuing outlook for 2010 is set to be challenging with a level of uncertainty being caused by the imminent general election,’ added Robinson.
‘It is likely that tax rises, public spending cuts and the end of the scrappage scheme in March will make consumers more cautious in their spending, certainly in the shorter term.’
Thus, the managed rundown of retail-driven scrappage sales must be supplanted by focusing efforts on business sales instead.
February 2010 sales growth contines
Tags: new car sales, RMIF, scrappage, SMMT