Belfast Telegraph

Scrappage incentive boosts car production

By Peter Woodman

Car production last month accelerated sharply, rising 64.8% on the January 2009 total, it was announced yesterday.

Commercial vehicle production in January 2010 also rose — going up 9.6% compared with January 2009, the Society of Motor Manufacturers and Traders (SMMT) said.

The big rise, with a total of 101,190 cars being made in the UK last month, was expected as the industry was stuck deep in the recession this time last year.

With demand for new vehicles low, companies cut back on production at the beginning of 2009, with Honda ceasing manufacturing at its plant at Swindon in Wiltshire for four months from February to May.

It was not until later in the year, following a leap in sales sparked by the Government's car scrappage scheme, that production began to pick up.

The car production increase was the largest since May 1976, while the commercial vehicle production rise was the second consecutive monthly increase.

The SMMT said UK engine production last month rose 26.3% compared with January 2009.

SMMT chief executive Paul Everitt said: “Vehicle and engine production rose for a third successive month in January, demonstrating the continued success of global scrappage incentive schemes.

“Despite the close of the UK scheme next month, SMMT expects a modest recovery in 2010 output as economic growth, a competitive exchange rate and the introduction of innovative new models to UK plants help to lift manufacturing levels above those seen in 2009.”

A Business Department spokesman said: “The January production figures show the benefits that the scrappage scheme is continuing to deliver to the automotive sector.

Belfast Telegraph