Boost in car production gives a glimmer of cheer

THE MOTOR industry yesterday offered the Government a glimmer of hope amid the economic gloom as new figures showed that output from Britain's car factories rose 14.5 per cent last month compared with a year ago, writes Michael Harrison.

Total production in September was nearly 104,000 compared with 90,600 in the same month last year, according to the Society of Motor Manufacturers and Traders.

Commercial vehicle output, at 19,228, was also up by more than 17 per cent on last year.

There was less welcome news from the steel industry, however, which reported that production in September fell 10.3 per cent against its level a year ago.

Car production for the depressed UK market remained flat last month at 43,000 but export production rose 25 per cent to nearly 61,000 vehicles.

Industry sources said this was due to increased production for Continental markets at Nissan's Sunderland plant and Vauxhall's UK factories.

The impact, if any, of sterling's devaluation, which would make British-built cars more competitive in overseas markets, is not expected to show up until this month's production figures are published.

The September figures were rushed out after Treasury officials implied that the August fall in industrial output was heavily influenced by declining car production.

Pointing out that car production in the first nine months was nearly 2 per cent up on the same period last year, Sir Hal Miller, the SMMT's chief executive, said: 'If the rest of UK businesses had put as much effort into selling product at home and overseas as the motor industry has done our economy might be moving out of recession.'

Despite the impressive figures, several manufacturers have announced cutbacks in employment and production in recent weeks, the latest being Ford and Lotus on Wednesday.