Car sales plunge despite scrappage scheme

CAR production plunged last year despite a late surge fuelled by the Government’s scrappage scheme.

Many companies cut back on manufacturing early in the year as recession-hit Brits cut back.

Honda was one of the companies badly hit – reducing production at its plant in Swindon, Wiltshire, for four months from February.

The introduction of the Government’s car scrappage scheme in May sparked new car sales and stemmed the drop in production.

For the first 11 months of last year car production was down 34.4 per cent, according to the figures from the Society of Motor Manufacturers and Traders. Commercial vehicle production dropped by 57.6 per cent.

However, in November car production had risen for the first time since September 2008, at 15.7 per cent.

Kevin Gaskell, the chairman of, said: “A number of manufacturers are likely to continue to support new car sales after the car scrappage scheme ends.

“This could take the form of lower new-car prices, subsidised finance schemes, free servicing or other similar customer support measures which should help to mitigate the likely drop in sales.

“These alternative support measures should be highly attractive to owners of older vehicles which didn’t qualify for the scrappage premium and so opens the opportunity to buy a subsidised new car to a wider audience of potential buyers.”