UK car sales near two million in 2009

Sales of new cars in the UK reached almost two million last year, the Society of Motor Manufacturers and Traders (SMMT) has said.

Although the number of registrations was the lowest level since 1995, sales in the latter half of the year were boosted by the scrappage scheme.

Full-year sales fell 6.4% from 2008's total to 1,994,999 vehicles.

New registrations in December rose by 38.9%, helped by consumers looking to beat the VAT increase, the SMMT said.

SMMT chief executive Paul Everitt said the yearly figure was "significantly above early expectations".

He added that it reflected the positive impact of the scrappage scheme, which is due to end in February.

Scrappage schemes sent sales soaring towards the end of 2009, not just in the UK but across Europe.

The biggest leap in new registrations was seen in Germany - up 23% compared with 2009, though France and Spain have also seen similar schemes fuel sales.

But as the schemes are coming to an end, it is beginning to dawn on motor industry executives that many of 2009's customers were sucked in from 2010's pool of car buyers. In 2010 there will be a vacuum, with fewer potential buyers in the market.

Companies that gained from the scrappage scheme this year may well see the sharpest falls in sales during 2010, and the countries that saw the strongest sales rises last year may well see sharp falls this year.

In short, the higher they climbed the harder they are likely to fall.

The scheme, which offers a £2,000 incentive to scrap old cars, has accounted for more than a fifth of all new car registrations since it came into effect on 18 May 2009.

In the first six months of the year, new car sales fell by 25.9%. In the second half of the year, they rose by 21%.

The Ford Fiesta was the best-selling model of the year, followed by the Ford Focus.

2010 concerns

However, there is now concern in the industry that sales will retreat once the scrappage scheme comes to an end.

The SMMT estimates that 2010 sales will fall back to below 1.8 million.

"Another tough year awaits the UK motor industry in 2010, with new car registrations expected to be below 2009 levels and only limited recovery in the van and heavy commercial vehicle markets," Mr Everitt said.

"Sustaining the progress made in the latter part of 2009 will require stronger demand from fleet and business buyers, alongside the greater availability and affordability of credit and finance."

The SMMT also said that average new car CO2 emissions continued to fall.

On average, new cars registered last year emitted 149.5g of CO2 per kilometre - a 5.4% reduction on 2008 levels.