VAT hike led to increase in car production
Tuesday January 12, 2010
The rush to purchase cars before the 17.5 per cent VAT rate was implemented led to a rise in car production, new figures show.
According to Auto Trader, the number of cars built in the UK increased by 15.7 per cent in November – the first rise since September 2008.
Around 112,948 vehicles were built in November, as more consumers also took advantage of the government’s scrappage scheme to exchange old motors and get a discount towards the cost of a brand new car.
The figures suggest a higher level of confidence in the car market, as growing numbers of consumers are returning to dealerships and driving up demand.
Matt Thompson, marketing director at Auto Trader said the figures spell good news for Britain’s car industry.
“We’ve seen a clear increase in buying activity as people take advantage of the scrappage scheme extension and make purchases before the January VAT rise,” he said.
In December, the Automotive Parts and Components Manufacturers Association in Turkey called for lower levels of VAT to help revitalise the country’s motor industry and help it cope with the economic downturn.