UK Car Production Falls Victim to Recession

Strong December figures which witnessed a resurgent car market with production leaping to more than 58% compared to the December of 2008, failed to affect the overall picture. According to the latest statistics from the Society of Motor Manufacturers (SMMT) car production in 2009 shrunk to 30.9% with less than a million vehicles being produced in UK, a fallout of the worldwide collapse in the car market. Car makers were also cautioned and told to prepare for a tough 2010.

The rosy December figures were helped by the car scrappage scheme introduced by the government in May, and extended in September, that helped boost demand in the latter part of a relatively gloomy year. The scheme which provides a £2000 incentive to scrap old vehicles and purchase new ones has been credited with about one in five of all new car registrations since its commencement in May. However, the scheme is likely to see its course coming February.

Taking on a positive note Paul Everitt, chief executive of SMMT intoned, "The significant rise in December vehicle production is welcome news and signals some greater stability across global automotive markets. We expect the year ahead to be extremely challenging, but the return of economic growth and a competitive exchange rate will help UK producers".