UK sales of new cars were down by a quarter in May compared to the same time last year, despite the government’s introduction of a £300m scrappage scheme to encourage buyers back into the new car market. Figures show a total drop in sales of 24.8%, marking the 13th consecutive monthly decline in sales.

A total of 289,958 vehicles were sold between January and May 2009, 289,958, a dramatic drop of 27.9% from the same period last year. The motoring industry has been hit hardest of all by the recession, and many manufacturers have been forced to resort to desperate measures to stay in business. The constant decline in sales has caused many manufacturers such as Nissan, Vauxhall, Honda and Ford to temporarily suspend production in their UK factories and a large number of workers have been left without jobs.

The new scrappage scheme introduced by the government should help begin to solve the problem, providing consumers with a £2000 incentive to scrap old cars registered before 1999 and buy a new one instead. Granted, £2000 is not going to enable you to trade in an old banger and buy a new Mercedes Benz, but it’s a step in the right direction and more than 35,000 orders have been put in so far, though the result of this is yet to be seen in the sales figures. This does not mean the scrappage scheme has failed however, as it only launched on the 18th May and the positive effect on car sales cannot be expected to be visible already. It’s hoped that the scheme will improve people's faith in the car industry that June's sales figures will tell a different story.

But there is one specific car market that is still doing well despite the woes of the wider car industry. The ‘mini’ segment grew by 50% in May, suggesting that consumers would rather buy a Nissan Micra, a Mini or a Ford Fiesta than a fuel-guzzling sports car or a people carrier. Smaller cars are much more fuel efficient not to mention cheaper to buy, for a lot of people a much more sensible option while times are hard.

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