The Society of Motor Manufacturers and Traders (SMMT) has revised its UK new car sales forecast for 2009 up by 100,000 units since the last quarterly revision in July 2009, to reflect the positive impact that the scrappage incentive scheme has had.

However, the SMMT said that the car market this year will be down by almost 10% at 1.93m units with a further significant drop forecast for 2010 when the market is forecast at 1.78m units. Recovery sets in in 2011 with the UK car market forecast at 1.86m units - a rise of almost 5% on 2010.

The SMMT also said the outlook remains challenging for vans but stability should occur over the next 12 months with further recovery in 2011 but volumes will remain below pre-recession levels.
 
"The Scrappage Incentive Scheme has had a demonstrably positive impact on new car registrations in 2009 and will continue to do so into 2010," said Paul Everitt, SMMT chief executive.

"SMMT's latest forecasts confirm that the recovery remains fragile and government needs to continue to give priority to measures that support consumer and business confidence," he said.

In 2007 the UK car market reached 2.4m units.