August car sales dash hopes of manufacturers

HOPES that bumper August car sales would provide the springboard for a recovery in the market were all but dashed yesterday as new figures showed virtually no improvement in registrations.

In the first 20 days of August 290,550 new cars were sold, compared with 288,000 in the same period last year. This suggests that total sales of K-registered cars for the month at best will only match last year's depressed level of 367,000.

Ford, which is cutting production at three of its main car and van plants because of falling sales, reacted to the latest figures by lowering its sales forecast for the year from 1.6 million to 1.55 million.

In the first seven months of the year, car sales were down by 4 per cent on the same period in 1991. Car manufacturers had been hoping for August sales of 400,000 to lift the gloom surrounding the industry.

Ford also announced that it is to invest pounds 100m in its Bridgend factory in South Wales to build a new engine for the next generation of Jaguar cars.

This is the first big production project undertaken for Jaguar at a Ford factory since the luxury car maker was taken over in 1989.

The AJ26, a four-litre V8 engine, will go into production in 1996 and will be used to power both Jaguar's next range of saloon and sports cars and a new, smaller, executive car planned for later this decade.

Manufacturing capacity at the Bridgend facility will be 50,000 engines a year. By the end of the year Jaguar plans to be building 100,000 cars a year.

A Jaguar spokesman said production of six and 12-cylinder engines for Jaguar's existing model range would continue at its Radford factory in Coventry.

However, Ford's decision to switch the new engine investment to South Wales is certain to place a question mark over the future of Radford.

'Bridgend has spare capacity and is a modern plant. By producing the engine there we can save at least 15 per cent of its costs - and in today's economic climate that is a vital component,' Jaguar's chairman, Nick Schele, said.

Although the investment will not mean more jobs, it was welcomed by Bridgend's trade unions. Andy Richards, the Transport Workers Union convener, said: 'It's very good news. This will protect the long-term future of Bridgend and give Wales an added export boost because it diversifies the range of engines we will be making.'