Positive signs in UK auto industry

18 June 2009

19 June 2009 | Martha McKenzie-Minifie

The rate of new car production fell again in the UK last month, but there are signs the market is picking up.

Figures released today by the Society of Motor Manufacturers and Traders (SMMT) showed car production was down 43 per cent in May, compared with the same time a year earlier. In April, it was down 55.3 per cent.

The May year-on-year drop was the smallest recorded for any month in 2009.

SMMT chief executive Paul Everitt said the outlook remained "difficult" but "positive signs" were evident. He pointed to scrappage schemes in the UK and elsewhere in Europe as helping to lift orders.

"The scrappage schemes in place across Europe are now beginning to have a positive impact, although the full benefits will take a little longer to flow down to companies at all levels in the supply chain."

Car manufacturers have taken more than 60,000 orders since the scrappage scheme began, according to figures released by Peter Mandelson, who became Secretary of State for Business, Innovation and Skills following the creation of the new Department on 5 June. In May, the then-Department for Business, Enterprise and Regulatory Reform showed one in every five - or 35,000 - recent new car orders were part of the scrappage scheme, which gives motorists a £2,000 grant to trade their old car when they buy a new one (News 11 June 2009).

But Everitt said commercial vehicle production was still "severely affected by low business confidence and economic uncertainty", and was down 73.5 per cent last month, compared to the same period a year earlier.


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