With the Scrappage Incentive Scheme scrapped after only three months in 2010, consumer confidence is at an all-time low. This may explain the drop in new car sales.
SMMT reports that a mere 128,000 new cars, 16,600 less than last year, were registered at the beginning of 2011.
Although this is a grave decrease, it is higher than SMMT had expected for January. Their predictions took into account the Scrappage Incentive Scheme producing a downturn in sales. A year ago, the program was responsible for a measurable 18% of sales.
The increase in VAT, starting in January, is another cause of this decrease, but so also is the increase in fuel prices.
SMMT CEO, Paul Everitt, explained that this decrease is only the beginning of a tragic year in cars. He also indicated that the government should alleviate the burden on motorists. He said, “Fuel duty should be frozen and taxes for motorists should be stabilised. The March Budget is the time to do this.”
With the decline in new car sales, there is an increase in the sales of low emission vehicles. One might note that the CO2 fumes are down as well, which is perhaps the sole benefit to all of this.
