UK car sales rise in Aug, scrappage scheme helps

New car sales in Britain rose for a second consecutive month in August, helped by the government's cash for bangers scheme, industry figures showed on Friday.

The Society of Motor Manufacturers and Traders said car sales rose 6 percent on the year to 67,006, building on a rise of 2.4 percent in July.

August is traditionally a quiet month for car sales as buyers wait for number plates to change in September.

The British government introduced a scrappage scheme earlier this year which gives drivers 2,000 pounds to trade in cars more than 10 years old against a new model.

The scrappage incentive scheme is having a positive impact but with consumer and business confidence still fragile, there remain significant risks ahead, said Paul Everitt, SMMT chief executive said Paul Everitt.

The top selling car in August was Ford's (F.N) Focus, with its Fiesta model in second place.

Other European countries, notably Germany, have also reported strong car sales earlier this month. But industry groups are worried that sales could flounder again unless incentive schemes are extended.

Britain's scrappage scheme is due to end in February 2010 but could end sooner of the 300 million pounds the government has earmarked for the project is exhausted.

(Reporting by Christina Fincher)