New car production down 43 percent in May

BBC Business News reports that the number of new cars made in the UK fell 43% in May from the same month a year earlier, the Society of Motor Manufacturers and Traders (SMMT) said.

However the drop, to 67,754 cars, was the smallest of the year. Commercial vehicle production fell 73.5%.

Several firms have temporarily shut factories or cut back production to run down existing supplies after the downturn hit demand for new vehicles.

Impact from the UK “cash for bangers” scheme will take a while to show.

In the first five months of 2009, car production was down 54% at 319,022 compared with the same period last year.

“Prompt action by manufacturers to realign supply with demand has been painful, but was necessary. There is now a direct link between demand in the marketplace and production volumes,” said Paul Everitt, SMMT chief executive.

He added that “low business confidence” continued to blight demand for commercial vehicles – mainly vans and lorries.

“Businesses across the economy are still holding back on new expenditure and will need to see better access to finance and stronger domestic demand.” Full story…