MercoPress. South Atlantic News Agency

UK British car industry contracted 30% during 2009

Demand collapsed in spite of the government’s scrappage scheme

The damage wreaked by the recession on Britain's car industry was made clear as figures showed production in 2009 dropped almost a third on the previous year. Car production was down 30.9% compared to the previous year to 999,460 vehicles, the Society of Motor Manufacturers and Traders (SMMT) announced.

Commercial vehicle (CV) production also took a battering, with just 90,679 produced - a 55.3% drop on 2008. The figures reflect the massive slump the industry suffered as demand collapsed, despite the boost from the Government's car-scrappage scheme in the second half of the year.

Car companies were forced to cut back sharply on manufacturing, with Honda even stopping production at its plant in Swindon, Wiltshire, for four months from February. The introduction of the scrappage scheme in May managed to boost new-car sales, while the decline in production halted.

By November car production had risen (by 15.7%) for the first time since September 2008, but production for the first 11 months of last year was still down significantly - by 34.4%. December figures offered some cheer, with production up 58.5% compared to 12 months earlier, but the SMMT warned 2010 is going to be “extremely challenging”.

With the car-scrappage scheme due to end soon, the motor industry is calling on politicians to take action to continue to support economic recovery.

SMMT chief executive Paul Everitt said: ”Car and commercial vehicle production remain well below pre-recession levels and it is essential that there continues to be a focus on creating more and better-priced finance for businesses and consumers”.