The number of new cars made in the UK in July was down 17.9 per cent compared with the same month last year, according to the Society of Motor Manufacturers and Traders.
But the drop, to 107,635 cars, was the smallest of the year so far. The SMMT said that reflected the impact of scrappage schemes throughout Europe.
"The UK motor industry is starting to stabilise, but remains fragile," said SMMT chief executive Paul Everitt.
Car production for the year to the end of July was down 45.8 per cent at 518,375.