Scrappage scheme sells 35,000 new cars

More than 35,000 new cars have been ordered under the scrappage scheme introduced two weeks ago.

The boost equates to one in five of all drivers ordering new cars taking advantage of the £2,000 subsidy – offered to those scrapping a vehicle at least 10 years old and buying a new model. Half of the hand-out comes from the government, the other half from the car manufacturer or dealership.

Despite teething problems on its first day as suppliers including Ford and Honda threatened to pull out due to uncertainties over VAT, car dealers across the country have reported significant consumer interest in the scheme.

The Government is unsurprisingly proclaiming a policy triumph. The Business Secretary Lord Mandelson said: "The scrappage scheme has got off to a flying start. It has given car sales a major boost and offers consumers a great deal. Even after two weeks the sales figures are impressive."

But car industry representatives say more time is needed to assess the impact. The RAC's motoring strategist Adrian Tink said: "The early signs are encouraging but it's still too early to declare the scheme a definite success and we'll need to see the results three and six months down the line."

Sceptics remain unconvinced that the plan will offer any real help to beleaguered car-makers. Eighty-five per cent of the cars bought in the UK are imported from elsewhere, and just two of the small cars tipped as the most likely winners from the subsidy are UK-made – the Mini and the Nissan Micra – and the Mini is too expensive to see much of a lift.

Professor Garel Rhys, at Cardiff Business School's Centre for Automotive Industry Research, said: "The vast majority of these 35,000 extra cars will come from foreign factories so are of little use in helping UK manufacturing. How far the scheme is a success depends on its purpose. It is clearly boosting sales, but it is not clear how it is helping the car-makers when such a high proportion of vehicles are imported."