Car production up 1.8 per cent

Car production returned to growth last month with more than 120,000 vehicles built in the UK - 1.8% up on a year ago, new figures showed today.

The Society of Motor Manufacturers and Traders (SMMT) said 120,036 vehicles were produced in June, boosting the numbers for the year to date to 662,852, an increase of 4.1% on the same time last year.

Chief executive Paul Everitt said the figures revealed a "welcome return to growth" for the motor industry in this country.

Commercial vehicle output fell by 2.2% to 10,425 in June and was down 4.9% over the first six months of this year, said the SMMT.

Engine production rose by 0.8% last month compared to June 2010, with almost 240,000 engines being built, up by 4.7% over the first six months of 2011 to a total of 1.3 million.

The SMMT said the forecast for UK car production was for 100,000 cars to be produced in the second half of this year.

Mr Everitt said: "Sustained investment in research and development, skills and new products by the UK automotive industry is helping to rebalance the economy, but there remain significant challenges.

"The economic recovery is still fragile, so Government and industry must focus their energies on encouraging growth and maintaining UK competitiveness."

Car output in the UK had been rising until April but fell in May by 4.9% due to plant shutdowns as a result of supply shortages from Japan following the earthquake and tsunami.

Most re-opened in early June, hence the modest growth in this month's data, with the SMMT expecting that to continue and the rate of growth to climb over the coming months.

More than 80% of cars built in the UK last month were exported, an increase of 14% over a year ago, while production for the home market fell by almost a third to 23,000.