Car sales slip for first time this year

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 yesterday.

Production for the year-to-date was still 41.7 per cent higher than in the same period in 2009, SMMT said.

Last month’s drop – with 98,000 cars produced – was the first since October.

Engine production fell 3.4 per cent while total vehicle production was down by 7.5 per cent to 107,578.

Commercial vehicle output grew 10.7 per cent in July and by 43.2 per cent per cent in first seven months of the year.

SMMT chief executive Paul Everitt said: “UK vehicle production is more than 40 per cent up on last year’s levels and while we expect some challenging conditions, economic growth has returned in all major markets around the world.”

The government scrappage scheme offered new buyers a £2,000 discount if they scrapped a car that was more than ten years old, which helped to boost demand. This scheme ended in March.

The car industry in Britain still accounts for a large chunk of the country’s manufacturing output even though most car manufacturers operating in the UK are foreign-owned.