A research report reveals that demand for green cars is down by over a tenth (16 per cent) since February 2009 - despite an overall increase of 58 per cent in online car searches since December 2008.
Experts at online site Motoring.co.uk warns that credit crunch pressures are to blame for the reduction in demand for green cars.
The website reveals that although online searches have increased, consumers are looking for cheap buys and the industry is slowing down. It is calling for the Government to stop stalling on introducing its scrappage scheme.
It's hoped the scheme will be a part of the budget due out next month.
The scrappage programme, which has proven successful in Europe, offers people a £2000 incentive to scrap their old car in place of a newer, less eco-damaging car.
Motoring.co.uk managing director, Richard Mason warns that any hesitation in launching the initiative could prove disastrous for the industry.
Of the 54,545 vehicles registered between 1980 and 2006, more than half, or 27,592, remain on the UK’s roads today - 12 percent of motors were registered before 1987.
MD Mason, argues: "The worst thing the Government can do is delay taking action, as this will result in a further slow-down in car sales as consumers wait for its implementation. Promotion of the new car industry remains the most important objective in the current climate to help prevent further job losses.
“Frankly, the government needs to stop resting on its laurels and get on with it.
"Given that most new cars are priced in excess of ten thousand pounds, the VAT from sales alone will ensure the government more than covers its proposed £2000 scrappage incentive.
With half a million motoring jobs at risk, the introduction of the scrappage scheme, which has been highly successful in Europe, will help encourage activity in the motoring industry by promoting the sale of new cars. “
Mason adds: "My final point relates to the governments concern with restricting the scheme to UK cars only - this is ludicrous and entirely impractical; this scheme needs to be open to all cars for it to have any chance of success.
"Contrary to popular belief, 86 per cent of cars sold in the UK are imported, whereas the majority of cars that people think are made abroad, are actually manufactured in Britain, eg. Toyota, Honda and (some) Nissan are all made in the UK. Similarly, Mini is owned by BMW and even Jaguar and Land Rover are owned by an Indian company.
"Besides the confusion it would cause to UK motorists, restricting this scheme would seriously impact its overall success, and we urge the government not to insist on futile conditions that would ultimately prove detrimental.”
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