Drop In UK Car Production Eases In July

LONDON (AP) -- U.K. car production fell in July, but the decline was the smallest this year as consumers took part in a government plan to trade old cars for cash, an industry group said Friday.

More than 107,000 cars were manufactured in July 2009, a 17.9 percent drop compared to July of last year, the Society of Motor Manufacturers and Traders said. The highest drop was recorded in February this year, when car production fell by 59 percent.

The society's Chief Executive Paul Everitt said that incentive plans across Europe contributed to the slowing decline in car production in the U.K. Under the British plan, consumers can get a 2,000 pound ($3,300) discount on a new car if they scrap a car at least 10 years old.

"The U.K. motor industry is starting to stabilize but remains fragile," he said.

He said the government should encourage banks to help consumers with finance and credit.

"High stock levels mean that vehicle production may not recover as fast as the market," Everitt said.

Car production so far this year has fallen by 45.8 percent compared to the January-July 2008 total of 955,670 cars. Commercial vehicle production is also down 63.8 percent for the year so far compared to last year's figure of more than 1,098,000 cars.

More in Operations