BBC News Online: Business

UK car output slumps

The sector has been continually in the doldrums, suffering from over-capacity and, in some cases, low productivity.

According to the Office for National Statistics, car manufacturers produced 124,000 vehicles in April, down 14.3% from April 1999.

Car production for the UK market fell 17.9% while export production was down 12.5%.

In the six months ending in April 2000, car production rose 7.0% compared with the previous six months as a result of the new twice-yearly change in registrations.

Hard times

The figures come as the UK car industry is suffering on of its worst crises.

Loss-making Rover narrowly avoided closure after financial consortium Phoenix signed a lifeline deal with BMW.

Ford recently announced plans to halt car production at its Dagenham plant because of over-capacity.

The UK car market has come under severe competitive pressures in recent years, largely as a result of decades of under-investment.

Most recently, however, manufacturers say the biggest problem has been the persistent strength of the pound against the euro.

A strong pound is making it much more difficult to export UK-built cars to the vast market of the eurozone.

To compete with Continental rivals counting their costs in euros, Rover had to make huge cuts in prices to the eurozone.