The success of the vehicle scrappage scheme has continued into July, according to new figures released today by the Society of Motor Manufacturers and Traders (SMMT).

In July, 21.0% of the total 157,149 new car registrations were as a result of the scrappage incentive scheme, providing a much-needed boost to the UK motor industry.

Paul Everitt, chief executive of the SMMT, said the scheme has contributed to the first increase in new car registrations since April last year.

Smaller, lower-CO2 emitting cars are taking the lion's share of new car registrations, which will have a positive impact in reducing emissions as well as boosting the UK motor industry.

Meanwhile, Sue Robinson, Director of the Retail Motor Industry Federation (RMIF) also believes that the scrappage scheme is having a positive effect on the whole market.

She said car dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers.

Latest Government figures show that 144,308 cars and light vans have been bought through the scrappage scheme since it went live on May 18, 2009.

However, Robinson warned that for sales to return to consistently positive levels in the medium to long term, business and general consumer confidence must be encouraged as much as possible.