British car production downturn slows

British car output fell 17.9 per cent in July from a year earlier but the pace of decline eased due to the government's scrappage scheme, the Society of Motor Manufacturers and Traders said yesterday.

July's decline was the smallest so far this year and followed a 30.2-per cent drop in production in June on a 12-month basis, the SMMT said in a statement.

"The slowdown in the rate of decline of UK car production reflects the impact of the scrappage incentive schemes in place across Europe," SMMT chief executive officer Paul Everitt said. "The UK motor industry is starting to stabilise but remains fragile. Industry needs government to deliver support through the Automotive Assistance Programme and encourage banks to provide access to much needed finance and credit."

In April, the government launched a scheme whereby cars of 10 years or older can be scrapped in return for a £2,000 (€2,250) discount on a new model.

The initiative, which is aimed at kick-starting Britain's troubled auto industry, is scheduled to last until next February.

The government contributes £1,000 per car while the industry provides a similar amount.