Rising car production may be a short-term relief for industry

THERE was a warning of "uncertain" times ahead for the motor industry yesterday after new figures showed a further strong recovery in recent UK car production.

According to the Society of Motor Manufacturers and Traders (SMMT), the number of cars made in the UK last month rose 28.6 per cent compared with June 2009.

A total of 117,938 cars were produced in June 2010, the figures revealed. Commercial vehicle production was up 24.9 per cent to 10,656 last month, while engine production rose 18.1 per cent.

After a first half of 2009 which saw sales and production reversing sharply, the first six months of this year have been a comparative boomtime for the motor industry.

Car production for the first half of 2010 is 55 per cent ahead of the January-June 2009 total, while commercial vehicle production is 49.6 per cent up and engine production has risen 35.3 per cent.

SMMT chief executive Paul Everitt said: "UK automotive production rose in June with steady improvement across the car, commercial vehicle and engine sectors against a weak 2009.

"Continued investment in new products and technology is helping to sustain growth for the sector while rising demand from export and home markets is maintaining momentum."

But he warned: "The coming months remain uncertain and sustaining economic recovery in major markets around the world remains the industry's top priority."

Car manufacturers were hit hard during the global slump, with production levels falling to 25-year lows last year. The car scrappage scheme provided a welcome shot in the arm. However, that ended in March and the prospect of austerity cuts and higher taxes could put a dampener on sales next year.