PLANS to scrap the August car registration plate change could be a £740 million disaster for the motor industry, according to a new report from KPMG Business Consultancy.

If the Government and the motor industry press ahead with plans to introduce a new vehicle registration system designed to remove the current August sales bulge the report suggests 50,000 car sales amounting to £740 million - the average new car costs £14,800 - could be lost. The motor industry claims a change would significantly cut costs through the elimination of vehicle stockpiling and improved cash-flow.

In addition, report author Roger Cockroft, KPMG's automotive consultant, claims 10,000 jobs could also be lost - 1,000 in car assembly plants and 9,000 in related industries.

The Society of Motor Manufacturers and Traders, the Retail Motor Industry Federation and the British Vehicle Rental and Leasing Association have said they would support an age-based identifier which would change on a six-monthly basis in March and September - commencing next March and running through the present sequence of prefix letters.