Car production continues to slide

May 22 2009

The latest figures released by the Society of Motor Manufacturers and Traders (SMMT) have revealed a continued fall in vehicle production during April.

As the recession deepens, fewer new cars are being sold and manufacturers are therefore cutting back on the numbers they roll off their factory production lines.

However, while the figures showed car production fell by 55 per cent in April compared to the previous year, the SMMT remained upbeat over the future prospects for the sector.

The organisation suggested the launch of scrappage schemes in the UK and across several European states would help boost the car industry in the months ahead.

"With the scrappage incentive scheme fully operational, industry is optimistic about the positive impact this will have on the market and on UK production facilities," said Paul Everitt, SMMT chief executive.

"Despite the current difficulties, the UK must prepare for the return of global growth and government support for the industry is an essential part of the process," he added.

The UK government launched its scrappage scheme earlier this week, although confusion surrounding the issue of tax payable on the £2,000 incentive scheme meant manufacturers HONDA and FORD delayed the introduction of their initiatives by a day.

While the popularity of new cars has declined during the recession, the UK has seen increasing numbers of people buying used cars as a way to cut costs, statistics from the British Car Auctions organisation have shown.

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