Start of year sees 65% acceleration in car production

Commercial vehicle (CV) production in January 2010 rose 9.6 per cent compared with January 2009, the Society of Motor Manufacturers and Traders (SMMT) said yesterday.

The manufacturing increase was the largest since May 1976, while the CV rise was the second consecutive monthly increase.

The big rise, with a total of 101,190 cars being made in the UK last month, was expected as the industry was stuck deep in the recession this time last year.

With demand for new vehicles low, companies cut back on production at the beginning of 2009, with Honda ceasing manufacturing at its plant at Swindon, Wiltshire, for four months from February to May.

It was not until later in the year, following a leap in sales sparked by the government's car-scrappage scheme, that car and CV production began to pick up.

The SMMT said UK engine production last month rose 26.3 per cent compared with January 2009.

SMMT chief executive Paul Everitt added: "Vehicle and engine production rose for a third successive month in January, demonstrating the continued success of global scrappage incentive schemes.

"Despite the close of the UK scheme next month, SMMT expects a modest recovery in 2010 output as economic growth, a competitive exchange rate and the introduction of innovative new models to UK plants help to lift manufacturing levels above those seen in 2009."

AA president Edmund King said: "It is encouraging to see this record boost in car production, which has been helped by the economic recovery and the vehicle scrappage scheme.

"However, car sales are also affected by the tax regime and therefore we think that the proposed 'showroom tax' on certain cars should be delayed or scrapped to further help economic recovery."

Meanwhile, troubled manufacturer Toyota has announced it will extend a planned temporary production stoppage at its two British plants, due to projections of reduced sales that are partly linked to recent recalls of some Toyota cars, the firm said yesterday.

The Burnaston plant in central England and the Deeside factory in Wales had already been scheduled to stop production for a week at Easter.

The stoppage has now been extended by a week.