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UK trumpets car scrappage success

May 31 2009 11:13

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London - British motorists have bought over 35 000 new cars under a vehicle scrappage scheme launched last month aimed at boosting the struggling auto sector, officials said on Friday.

Prime Minister Gordon Brown joined new car owners outside his Downing Street office to trumpet the scheme, which gives buyers a £2 000 discount when they trade in a car over 10 years old.

"This scheme not only helps hard-pressed consumers, it also helps protect British jobs by stimulating demand for new cars," said Brown, while stressing the discounts won't be available forever.

"I just say to people though, it is time-limited, it's first come first served. So if they don't want to be disappointed, get your orders in soon," added Brown, alongside Business Secretary Peter Mandelson.

As in other countries, sales of new cars have plummeted amid the global slowdown. In March they fell by almost a third, the 11th consecutive monthly drop. Firms like Nissan have announced job cuts at their sites here and others like Jaguar Land Rover have brought in shorter hours and pay freezes.

Britain has been hoping that the scheme - which is costing £300m - proves as popular as one launched in Germany, where the government has put up some €5bn.

There, an initial budget of €1.5bn was approved to cover state subsidies for the purchase of 600 000 cars but this was increased after much higher than expected demand.

In March, German auto sales soared 40% from the same month a year earlier to 401 000 vehicles.

The Society of Motor Manufacturers and Traders gave a cautious welcome to the initial results from the scheme, which was unveiled in April and which is funded half by the government and half by car companies.

"The industry has been encouraged by the positive start to the scrappage incentive scheme shown through increased orders, showroom traffic and web inquiries," said a spokesperson.

"But it will be a couple of months before we can really assess the true impact on the market through the monthly registrations data."

- AFP

 
 
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