British car output shows smallest drop in 2009

Car production in Britain dropped by the smallest monthly amount so far this year during October thanks to the government's old-for-new scheme, industry data showed on yesterday.

A total of 106,400 cars were manufactured in Britain last month, a 6.7-per cent drop on the figure in October 2008, the Society of Motor Manufacturers and Traders said in a statement.

That compared with a 16 per cent drop in September and 31.5 per cent plunge in August, demonstrating the success of the scheme which gives buyers who trade in old cars £2,000 towards a new vehicle.

The so-called scrappage scheme, which was introduced in May and was originally due to end in February, is being extended as Britain remains in recession. The cost of the £2,000 incentive is shared between the taxpayer and car manufacturer.

Car production for the year so far meanwhile - at just over 801,000 units - is down 38.1 per cent compared with the first ten months of 2008, the SMMT added yesterday. The society's chief executive officer Paul Everitt said: "The rate of decline in UK car production continued to fall in October, against a weak 2008.

"The scrappage scheme and early signs of recovery in global markets offer some encouragement to UK vehicle producers, but 2010 is expected to be another difficult year for the industry," he added.