UK car production tumbles in June

07-25-2009 14:45

Figures from the Society of Motor Manufacturers and Traders (SMMT) showed that the number of produced vehicles in the UK dropped 30.2% in June compared to June 2008. Despite the recession it appears that the pace of decrease in car production is weakening as the fall in June was the smallest of the present year up to now, according to the SMMT. Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, commented that UK’s car manufacturing industry was at the commencement of a long period of improvement.

Car output plunged

Commercial car production dropped 60.4% to 8.532 cars. The plunge in demand for new cars led to provisionally closed plants by various companies or reduced production as a result of decreased orders. During the first half year of 2009, car output fell 50.2% to 410.740 in comparison with the first six months of 2008.

‘Cash for bangers’

It will need some time before the effects of the Government's ‘cash for bangers’ scheme, which provides car owners a £2.000 reduction if they buy a new car and trade in their car older than ten years, will become clear.

Long period of improvement

Everitt stated: “The British car industry is lasting out the worldwide slump and it is at the commencement of a long period of improvement. The administration should stimulate banks to provide industries the required credits while they also should contribute to maintain and strengthen consumer confidence, as registrations and production quantities become more stable.” He also mentioned that commercial car production remains ‘exceptionally low’. “This proves the complexity of the economy and the fragileness of business confidence in main markets, especially construction and transport sectors.”