UK car production down 16.1 percent but smallest decline for a year

UK car production fell 16.1 percent year on year in September, the smallest decline for 12 months, the Society of Motor Manufacturers and Traders have revealed.

The SMMT said 119,616 cars were made in Britain last month taking the total yearly total to 694,769, a decline of 41.2 percent on the same period a year ago.

“The rate of decline … slowed to its lowest level in a year with the volume of vehicles being produced for the UK market comparatively high,” said Paul Everitt, SMMT chief executive.

“Demand is clearly being underpinned by the scrappage incentive scheme and the extension to the scheme will ensure that demand continues into 2010.”

The government’s car scrappage scheme, introduced in April, allows motorists to trade in cars more than 10 years old in return for a 2,000 pound subsidy on a new model.

“The UK economy is slowly emerging from recession, but businesses remain reluctant to commit to large capital investments and this is reflected in low demand for commercial vehicles,” Everitt said.

The SMMT has also revised its new car registration forecast for 2009 up by 100,000 units since its last quarterly estimate in July, reflecting the positive impact of the car scrappage scheme. It predicted total car registrations at 1,928,100, down 9.6 percent for the full year, with further declines expected in 2010 before a recovery in 2011.