Car production falls 8.9%

The number of cars built in the UK fell 8.9% in August, bringing to a halt a 13-month run of increases, figures revealed today.

However, the Society of Motor Manufacturers and Traders (SMMT), which produced the figures, said volumes are traditionally low in the month as manufacturers use the holiday period to upgrade facilities and carry out maintenance work.

Despite conditions in Europe being a concern, it believes production will return to growth, helped by strong demand from other overseas markets.

The 78,577 cars produced in UK in August brings the total for 2012 so far to 955,084, which is a 12.7% hike on the previous year.

The number of commercial vehicles built rose 18% to 7,608. Overall, vehicle production was 7% down in the month to 86,185 but up 11% in the year so far.

Vehicle manufacturing has been a success story for the UK since the financial crisis and production is expected to hit record levels by 2015, underpinned by demand from emerging markets where brands such as Jaguar Land Rover are proving popular.

Some 80% of cars and 60% of commercial vehicles were exported this year.

There was also a hike in the number of engines made in the UK, up 12.5% in the month, with most going overseas.

SMMT chief executive Paul Everitt said: "Volumes are traditionally low and variable in August as manufacturers use the holiday period to undertake important maintenance and facility upgrades.

"Continued weak demand in Europe is a concern, although significant new investment and stronger demand from better performing global markets will ensure UK output continues on an upward trend."

Seven mainstream car manufacturers and 10 sports car manufacturers operate in the UK, along with eight Formula One teams and 11 bus and coach makers.

The UK is Europe's fourth biggest manufacturer of cars and the automotive industry represents about 3% of GDP.

PA