August car output falls but cars built for UK market reaches 5-year high
The Society of Motor Manufacturers and Traders (SMMT) today announced an annual fall of 31.5% in the number of new cars made in the UK last month.
The decline in production was worse than the 17.9% fall seen in July, but this was partly due to car plants having extended shutdowns in August.
According to the SMMT, 56,737 cars were made last month and while this was down compared with August last year – it was far better than the 44.6% decline seen over the year to date.
However, the number of cars built for the UK market reached its highest level in almost five years as a result of the scrappage scheme, which has boosted car sales.
The scheme, which was launched on 18 May to boost the ailing car industry, pays consumers £2,000 to get rid of their old cars and replace it with a more environmentally friendly car.
The £300 million initiative is to run until the end of February 2010 but the Retail Motor Industry Federation (RMIF) believes the funding could run out by the end of the year.
However, the SMMT believes the funding could run out as early as the end of next month.
Earlier this month, the BBC reported that Ford and Toyota were urging the UK Government to extend the scheme.
Commenting on today’s figures, SMMT chief executive Paul Everitt, said: “The scrappage incentive scheme has had a positive impact on car production with one in three cars built in the UK last month for the home market and total volumes starting to stabilise.”
“However, underlying demand remains weak and the recovery is still extremely fragile. A continuation of the scrappage incentive scheme through to the original close date of 28 February 2010 would help to sustain growth and bridge uncertainties associated with the ending of VAT discount,” added Mr Everitt.
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