UK car dealer Pendragon is urging the government to continue with the car scrappage scheme, once the current commitment of £300million has been exhausted.
The scheme has rejuvenated the new car market with figures for July, the first full month of operation, showing a year on year rise for the first time in 2009.
Trevor Finn, CEO of Pendragon says that the government scheme has led to a positive effect on car sales in what has been a very challenging market in the first half of 2009. Pendragon posted half year pre tax profits of £11.4million, a far cry from the £21.1million shown this time last year.
The car scrappage scheme was due to end in February but already the fund supplied by the government has passed the half way mark and looks likely to run dry within the next couple of months.
The scheme was introduced in line with other European countries including Germany and Spain as a short term measure to bolster the decline in the motor manufacturing industry. It has overall been a great success, but car dealers and manufacturers alike will find themselves in exactly the same position they started at if the scheme is not renewed, at least until the economy shows positive signs of recovery.
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