Production of cars in the UK fell 8.9 per cent to 98,000 units in July as termination of the scrappage scheme hit demand, the Society of Motor Manufacturers & Traders (SMMT) said.

Despite fall in monthly production of cars, total number of cars produced during the year-to-date was still 41.7 per cent higher than the corresponding period of last year. Total number of vehicle produced in July slipped 7.5 per cent to settle at 107,578, while engine output was down 3.4 per cent.

Commercial vehicle production jumped 10.7 per cent and 43.2 per cent in July and in the first seven months of this year, respectively.

SMMT’s chief executive Paul Everitt said that economic growth returned in almost all major markets around the globe.

Speaking on the topic, Mr. Everitt said, “UK vehicle production is more than 40 per cent up on last year’s levels and while we expect some challenging conditions, economic growth has returned in all major markets around the world.”

The scrappage scheme was introduced in wake of recession to provide a boost to the manufacturing sector. Under the scrappage scheme, new buyers were offered a discount of up to £2,000 if they scrapped a more than
10-year old car for a new one.

The government terminated the scrappage scheme in March.