CAR production in Britain dropped by 8.9 per cent in July as the end of the scrappage scheme hit demand, the Society of Motor Manufacturers and Traders (SMMT) said.
Production for the year-to-date was still 41.7 per cent higher than in the same period in 2009, the SMMT data showed.
Last month's drop was the first since October.
SMMT Chief Executive Paul Everitt said: "UK vehicle production is more than 40 per cent up on last year’s levels and whilst we expect some challenging conditions, economic growth has returned in all major markets around the world."
The car industry in Britain is largely foreign-owned but it still accounts for a large chunk of the country's manufacturing output and provides more than 800,000 jobs.