Bumpy road ahead for UK car suppliers when scrappage scheme ends
Commenting on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures, Mike Steventon, Partner with KPMG's automotive group said:
"New car sales continue to show year on year growth, with new car registrations rising by 29.8% in January to 145,479 units.
This peak has been supported by the ongoing UK scrappage scheme which has boosted the market for the seventh consecutive month, however as the scrappage scheme comes to an end in March 2010 (extended by one month), the impact on UK car sales is likely to be substantial from April onwards.
"The car scrappage scheme has recently ended in Germany and new car sales in January 2010 fell to its lowest level in 20 years. It is highly likely that UK new car sales will also experience a significant reduction following the end of the UK scrappage scheme - UK car retailers should brace themselves for a bumpy road ahead. However, as the vast majority of cars sold in the UK under the scrappage scheme are imported vehicles, there will be less of an impact on UK car manufacturers and parts suppliers who are more reliant on overseas and prestige markets"
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