KPMG warns that the car industry should be prepared for more bumps in the road as the scrappage scheme comes to an end.

Car sales rose 26.4% in February compared to the same time last year according to the Society of Motor Manufacturers and Traders (SMMT), with a boost of nearly 20% from the government scrappage scheme.

Traditionally a slightly quieter month ahead of the March plate change, total car sales for February were 68,686, with small car sales consistently making up the top ten best sellers. The Ford Fiesta continues to lead the way with year-to-date sales of over 12,000, over 2,000 more than its nearest rival, the Vauxhall Corsa.

However, it’s the success of the government scrappage scheme which is being cited as the biggest factor in the rise of the motor industry. Due to finish at the end of March, or before if funds run out, many are questioning how the industry will respond.

“Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme’s closure later this month,” said Paul Everitt, the SMMT Chief Executive, despite later admitting that the industry will see a decline in the second half of 2010 as the scheme’s impact diminishes.

Advisory firm KPMG say that the February increase is a false indication of a new dawn in car sales. “If the impact of scrappage scheme is removed, then the underlying outlook is for no more than a gradual recovery at best.

“The automotive industry should brace itself for more bumps in the road when the car scrappage scheme ends this month.”

Although, KMPG concedes that there could be light on the horizon as some manufacturers have announced plans to launch their own “swappage scheme”. Vauxhall, Toyota, Hyundai and Nissan are just some of the car companies which have chosen to fund their own discount scheme to encourage people on to the forecourts.