David Prosser: UK car trade slips further into reverse

Outlook At the height of the recession, the monthly car production figures published by the Society of Motor Manufacturers and Traders were closely scrutinised, particularly once a scrappage scheme was introduced to help the motor trade through the worst of the slowdown. The figures get less attention nowadays, because this is no longer an industry in crisis, but they still offer interesting insights.

Take yesterday's data, for the month of May. They showed a 5 per cent fall in UK car production in May – but some of this was due to bank holidays, while the parts shortages caused by the Japanese natural disasters did not help either. Overall, UK car production is up 4.6 per cent so far this year.

Very healthy, one might think. Well, to a point. The breakdown between cars produced for export and for the home market is important. While Britain has made 20 per cent more cars for overseas buyers this year, production for the home market is down by more than 37 per cent.

In part, this is a hangover from scrappage that will eventually clear. But in the meantime, while the higher production is good news for the manufacturing end of the automotive sector, the domestic trade is having a rough old time.

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