MercoPress. South Atlantic News Agency

UK auto industry calls for “scarappage scheme”

British Business Secretary Lord Mandelson said that UK motor companies will survive “if they take the right decisions” despite another huge monthly fall in car production. Official figures showed the number of cars made in the UK last month fell 59% compared with February 2008, while commercial vehicle production slumped by 71.6%.

The figures were published by the Society of Motor Manufacturers and Traders (SMMT) - 24 hours after it announced cancellation of the 2010 British International Motor Show because of the recession.

SMMT chief executive Paul Everitt said: “The large fall in February's vehicle production is a direct result of weak demand and the need to protect the highly-skilled workforce and valuable industrial capability in the UK automotive sector.

”We have seen action to encourage longer-term investment but still require Government support for short-time working, easier access to finance and credit and the implementation of a vehicle scrappage scheme.“

The scrappage scheme - under which motorists would be paid to trade in their old cars for more eco-friendly models - has been introduced in a number of European countries. Lord Mandelson said last month that ministers were looking at such measures but no decision has been announced.

AA president Edmund King said: ”These plummeting car production figures show the urgent need for a boost to this vital industry. Car scrappage schemes in countries such as Germany are already having a positive effect on sales.“

Lord Mandelson, who visited the Nissan car plant in Sunderland, said: ”The car manufacturers, their huge supply chain, are a cornerstone of our manufacturing sector.

”They employ very, very many people, so their survival is important, and they will survive, they will thrive in the future, as long as they make the right decisions now”.