Page last updated at 08:49 GMT, Friday, 24 July 2009 09:49 UK

Decline in UK car output slowing

Car showroom
It will take a while for the impact of the scrappage scheme to take effect

The number of new cars made in the UK fell 30.2% in June from the same month a year earlier, the Society of Motor Manufacturers and Traders (SMMT) said.

But the drop, to 91,718 cars, was the smallest of the year so far. The SMMT said that despite the recession, the pace of decline in output was slowing.

SMMT chief executive Paul Everitt said the UK motor industry was "beginning the long road to recovery".

Commercial vehicle production fell 60.4% to 8,532 vehicles.

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

'Weathering' recession

Impact from the UK "cash for bangers" scheme, which gives car buyers a £2,000 discount on a new car if they scrap one that is at least 10 years old, will take a while to show.

In the first six months of 2009, car production was down 50.2% at 410,740 compared with the same period last year.

"The UK motor industry is weathering the global recession and beginning the long road to recovery," said Mr Everitt.

"As production volumes and registrations begin to stabilise, government must help to sustain consumer confidence and encourage banks to deliver the credit industry needs."

However, Mr Everitt added that commercial vehicle production was still "extremely low".

"This reflects the difficult economic conditions and fragile business confidence in key markets, particularly the road haulage and construction sectors," he said.

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