Page last updated at 12:44 GMT, Friday, 21 August 2009 13:44 UK

Decline in UK car output slowing

Nikki Rooke, SMMT: The motor industry is optimistic despite its "current fragile state"

The number of new cars made in the UK fell 17.9% in July from the same month a year earlier, the Society of Motor Manufacturers and Traders (SMMT) said.

But the drop, to 107,635 cars, was the smallest of the year so far. The SMMT said that reflected the impact of scrappage schemes throughout Europe.

On a visit to a dealership on Friday, Chancellor Alistair Darling stressed that production had risen from June.

In June, 91,718 cars were produced, which was down 30.2% from 2008.

"It's not surprising that in the teeth of a pretty severe downturn, it [car production] has gone down year on year," he said.

"What we are now seeing though is an increase in production over the previous month and that is due to a significant extent to the introduction of the scrappage scheme."

The chancellor was visiting a Manchester branch of the Scottish-based car dealer Arnold Clark, which has announced that it is to create 700 new jobs across the UK by early next year, including 500 sales jobs.

It said that the "stabilisation" of the car market because of the government's scrappage scheme had been a factor in its decision.

Growth next year

Commercial vehicle production was still much lower than last year, down 59.8%.

The SMMT applauded the slowdown in production declines, but said it was not expecting to see actual growth for a few months yet.

"It probably won't be until the very end of this year, possibly into 2010, that we start to see growth within the year-on-year production figures," Nikki Rooke at the SMMT told the BBC.

"But over the year to date we are still down nearly 50% and that's a considerable amount that needs to be made up."

Car production for the year to the end of July was down 45.8% at 518,375.

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