The BBC has an article in the business section entitled “Car sales see continued recovery”. The opening paragraph from the article seems to be good news :

UK car sales in February were up by 26.4% compared with the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).

I saw the headline and thought I would have a look at the article itself as I am well aware of both the governments scrappage scheme as well as the BBCs propensity for a certain political bias in its reporting. There is also the usual sloppy BBC reporting in evidence as the lead paragraph wrongly states sales and later paragraphs correctly state registrations.

Lets dig in with a bit of maths shall we?

According to the article, February saw new registration of 68686 vehicles which was an increase of 26.4% on February 09.

This gives us Feb 09 sales of 54340 new vehicles (68686/1.264 if you are interested). From this, we can see that 14346 more cars were registered this February than last (68686-54340).

The article also says that nearly 1 in 5 of February 2010 registrations was due to the scrappage scheme and most people will probably think well that’s 20% then so registrations are up 6% overall and everything is looking good.

A trip over the the Society of Motor Manufacturers and Traders (the SMMT quoted above) gives us a scrappage contribution to Februarys registrations of 19.6%. This then gives us 13462 vehicles registered in February due to government bribes the scrappage scheme (68686*0.196).

So, we now have the real increase in registrations excluding bribery of 884 vehicles (14326-13462) which is a somewhat less impressive increase over February last year of 1.6%.

It is also quite possible that the increase in registrations is due to people buying late last year to avoid the VAT increase (registrations lag behind the actual sale by some months depending on delivery times) so I wouldn’t be surprised to see a fall later in the year. This would also seem to be the SMMT’s view :

The SMMT said that it expected to see some market decline in the second half of 2010 and predicted an overall decline in 2010 of 10%.

Considering the wider economy and its anemic growth even after being thoroughly stimulated, the unstimulated future in the UK isn’t look very good at all.