Car production still struggles in spite of Government's 'cash-for-bangers'

Updated: 10:36 EST, 23 October 2009

Car production figures for September show that 199,616 cars were made in the UK
in September, down 16.1per cent on the same month last year.

Although this fall is hefty, it is notably less than August, when production dropped 31.5 per cent.

The September figures mean car production is falling at the slowest pace for a year, attributed to a large extent to the car-scrappage scheme which has boosted new car sales, the Society of Motor Manufacturers and Traders believes.

July car production fell only 17.9 per cent compared with July 2008.

Car production for the first eight months of this year is down 44.6 per cent compared with the January-August 2008 period.

Much of the recovery is put down to the £300m 'cash-for-bangers' scrappage scheme which was announced in the Budget and introduced in May

New car sales fell for 15 successive months until there was a 2.4 per cent rise in July 2009.

This was followed by an increase of 6 per cent in August and an encouraging rise of 11.4 per cent in September when the new 59 number plates were introduced.

The September surge meant that new car registrations for the first nine months of this year were only down 15.5 per cent compared with the January-September 2008 period.

Much of the recovery is down to the £300million 'cash for bangers' scrappage scheme which was announced in the Budget and introduced in May.

Last month the Government announced it was extended the scheme to include an extra 100,000 cars.

As part of the extended scrappage scheme, van owners looking to trade in their vehicles will now be able to scrap vehicles that are eight years old, rather than meet the previous 10-year requirement.

Also, the age qualification for car owners now extends the benefits to cars registered on or before February 29 2000.

Kevin Gaskell, chairman of motoring.co.uk, said: 'We anticipate that vehicle production figures for September will show a good year-on-year increase.

'The scrappage scheme has thrown a lifeline to vehicle component suppliers, car manufacturers and dealers who were struggling to deal with an unprecedented fall in new orders during the last half of 2008 and first half of 2009.'