Scrappage scheme helps car industry

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The Government looks to have come up trumps with its "cash for bangers" car-scrappage scheme as the rate of decline in car production reached a yearly low point.

Although dropping by 17.9% in total on last year's figures, production rate picked up as 107,635 were made in the UK in July, the Society of Motor Manufacturers and Traders (SMMT) said.

It is by far the smallest monthly decline of the year and will provide a much-needed boost to the industry.

It was not all good news, however, as commercial vehicle (CV) production fell 59.8% last month. CV production is currently down 63.8% in 2009.

Overall car production is so far 45.8% down on the January-July 2008 total - a direct result of cutbacks made by major car companies earlier in the year.

There was the first monthly increase since April 2008 though in the new-car sales statistics for July. The 2.4% rise is heartening for the motor industry and reflects well on the scrappage scheme, brought in by the Government in May.

SMMT chief executive Paul Everitt said: "The slowdown in the rate of decline of UK car production reflects the impact of the scrappage incentive schemes in place across Europe."

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