Car sales rise despite end of scrappage scheme

LONDON (Reuters) - New car registrations in Britain rose 10.8 percent in June to 195,226 vehicles, their 12th successive monthly increase, the Society of Motor Manufacturers and Traders (SMMT) said on Tuesday.

A 25 percent increase in sales in the fleet market, or large-scale orders from businesses, helped to offset the end of a scrappage scheme offering motorists incentives to trade in older models.

Industry group the SMMT repeated its warning that volumes were set to slip in the second half of 2010 after an increase of 19.9 percent in the first six months of the year.

"The new car market continued to perform above expectations in June," said Paul Everitt, SMMT chief executive.

"The industry still expects challenging economic conditions in the second half of the year, and government action to improve access to credit for consumers and businesses will be important in sustaining the momentum of recovery."

The Vauxhall Astra was the best-selling model in June, the first time it has topped the sales chart since February 2008.

Ford's Fiesta model was the best-selling car over the first half of 2010, ahead of Ford's Focus and the Astra.

The scrappage scheme accounted for only a fraction of registrations after it closed to new orders earlier this year.

Jointly funded by the government and the industry, the scheme offered new motorists 2,000 pounds to trade in cars more than a decade old for more fuel efficient vehicles.

Similar to schemes in other European nations, it was designed to shield the industry from the worst effects of the recession.

Britain's car industry is now largely foreign owned but it still employs around 800,000 people in the country.