RTTNews - The pace of decline in U.K.'s new car registrations eased significantly in June boosted by government's car-scrappage scheme, data released by the Society of Motor Manufacturers and Traders Limited or SMMT showed Monday.

New car registrations fell 15.7% year-on-year in June to 176,264 units after falling 24.8% in May. June's decline was the smallest since July 2008, although year-to-date demand fell 25.9%, the SMMT said.

The scrappage scheme, which offers motorists GBP 2,000 incentive to scrap their cars over ten years old, is now beginning to deliver registrations to the market, the association said.

We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations, said Paul Everitt, SMMT chief executive. SMMT expects the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery.

Registrations to private buyers rose 3.9% year-on-year in June, the first increase since November 2007.

According to the SMMT, demand for small cars also picked up, with the mini segment showing growth of 145.4% in the month, while superminis took a record 37.2% share of the market. Ford's Fiesta was the best selling model for a fifth time this year.

The growth in small car demand contributed to the fall in diesel penetration, with small cars tending to be petrol powered. However, diesel market share is still up over the year-to-date, the SMMT said.

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