Consultants at Deloitte have called for an extension to the UK’s scrappage incentive and warned that the scheme could end next week as the existing funding budget is exhausted.

They also say that an announcement of an extension needs to be made urgently in order to avoid marketplace confusion.

David Raistrick, UK Manufacturing Leader at Deloitte commented: “As it looks increasingly likely that the scrappage scheme will end next week, declining car production figures for August highlight the importance of an extension to the scheme.

“This is the wrong time for the industry to lose the support of scrappage which has without doubt boosted car registration figures and helped production figures. To avoid consumer confusion any extension needs to be announced in the next week or two.”

Raistrick called for an extension of the scheme to June 2010 or a further contribution of GBP300m from the UK Government.

“The scheme has also encouraged consumers to purchase smaller, more environmentally friendly cars and has been good for the entire automotive industry. Given how the scheme has been set up, the Government is able to fully recover their contribution through additional VAT and other tax revenues raised,” he said.

See also: UK: SMMT calls for scrappage scheme extension