UK Car Production Down In May

LONDON (AP) -- Car production in the United Kingdom fell by nearly 1 percent from April to May, when the industry was yet to benefit from government-backed incentive programs, the Society of Motor Manufacturers and Traders said Friday.

Car production in May was 67,754 units, down from 68,258 in April. Some 80 percent of the cars were exported.

May production was 43 percent below May 2008, the smallest year-on-year difference posted so far in 2009. For the year to date, U.K. car production is running 54 percent behind 2008 levels.

"Prompt action by manufacturers to realign supply with demand has been painful, but was necessary. There is now a direct link between demand in the marketplace and production volumes," said Paul Everitt, the society's chief executive.

"The scrappage schemes in place across Europe are now beginning to have a positive impact, although the full benefits will take a little longer to flow down to companies at all levels in the supply chain."

Britain started its scrappage program in May. The government and manufacturers are splitting the cost of 2,000-pound ($3,268) discounts to new-car buyers who trade in a car at least 10 years old.

Germany and other continental countries have similar programs.

Commercial vehicle production remained severely depressed. May's output of 4,692 vehicles was 73.5 percent lower than a year earlier.

More in Operations