Shrinking demand caused output to drop by almost fifty per cent in December 2008
22 January 2009

Total car production in Britain shrank dramatically in the last part of 2008, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) have revealed.

Production in December 2008 fell by nearly fifty per cent year on year as makers responded to rapidly dwindling sales.

December output fell to 53,823 cars compared with the last month of 2007, when around 100,000 cars left UK factories.

“These figures demonstrate the very dramatic fall in demand in the last quarter and the need to stimulate demand with government measures,” said the SMMT.

Over the next few days, the SMMT is scheduled to meet with business secretary Lord Mandelson to hear whether the government will support the car industry.

Despite December’s grim figures, the industry actually produced a reasonable number of cars over the whole year; total output hit 1.44m units. That’s only a drop of 5.7 per cent on 2007’s figures.

The SMMT is predicting that output in 2009 will drop still further, possibly as low as 1.3m units, which would take the UK motor industry back to 1993 levels.

Overall that would represent the loss of 200,000 cars, in other words the entire annual output of an average-sized factory.

Julian Rendell

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