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Carmakers call for further scrappage

Car manufacturing in the UK fell by almost a third in August, according to new figures.

56,737 cars were built in UK factories in August, a figure 31.5% lower than August 2008. As a result the Society of Motor Manufacturers and Traders is calling on the government to extend its scrappage scheme into the new year.

The figures were worse for commercial vehicles, down by 48.5%.

The SMMT said the £300 million scrappage scheme fund was likely to run out by the end of next month and called on the Government to extend it to next February.

Paul Everitt, chief executive of the SMMT, said: “The scrappage incentive scheme has had a positive impact on car production, with one in three cars built in the UK last month for the home market and total volumes starting to stabilise.

“However, underlying demand remains weak and the recovery is still extremely fragile. A continuation of the scrappage incentive scheme through to the original close date of February 28 2010 would help to sustain growth and bridge uncertainties associated with the ending of VAT discount.”

Engineering Employers’ Federation External Affairs Adviser, Tony Sarginson, said: “The success of the scrappage scheme has been clear for all to see and has put a floor under manufacturing recession and helped retain skilled employees.

“However, it is no means certain that this positive trend will continue in the near future with consumer confidence still fragile and unemployment still rising. Failure to extend the scheme before a stronger recovery is in place runs the risk of pulling the rug from under the automotive sector, damaging key supply chains and prospects for a better balanced economy in the upturn.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .