Car production rockets 64 per cent

Car production last month accelerated sharply, rising 64.8 per cent on the January 2009 total, it was announced toda

Commercial vehicle (CV) production in January 2010 also rose - going up 9.6 per cent compared with January 2009, the Society of Motor Manufacturers and Traders (SMMT) said.

The car production increase was the largest since May 1976, while the CV rise was the second consecutive monthly increase.

The big rise, with a total of 101,190 cars being made in the UK last month, was expected as the industry was stuck deep in the recession this time last year.

With demand for new vehicles low, companies cut back on production at the beginning of 2009, with Honda ceasing manufacturing at its plant at Swindon in Wiltshire for four months from February to May.

It was not until later in the year, following a leap in sales sparked by the Government's car scrappage scheme, that car and CV production began to pick up.

The SMMT said UK engine production last month rose 26.3 per cent compared with January 2009.

SMMT chief executive Paul Everitt added: "Vehicle and engine production rose for a third successive month in January, demonstrating the continued success of global scrappage incentive schemes.

"Despite the close of the UK scheme next month, SMMT expects a modest recovery in 2010 output as economic growth, a competitive exchange rate and the introduction of innovative new models to UK plants help to lift manufacturing levels above those seen in 2009."

A Business Department spokesman said: "The January production figures show the benefits that the scrappage scheme is continuing to deliver to the automotive sector. I am pleased that the scheme has helped the industry to achieve its biggest output gain since May 1976.

"There are only a few weeks left to take advantage of the scheme. Car owners that are still keen to take part need to place their orders now to avoid disappointment."

AA president Edmund King said: "It is encouraging to see this record boost in car production, which has been helped by the economic recovery and the vehicle scrappage scheme.

"However, car sales are also affected by the tax regime and therefore we think that the proposed 'showroom tax' on certain cars should be delayed or scrapped to further help economic recovery."