Demand for cars and commercials remains weak

Production numbers for August were down to 56,737 although cars built for home consumption in the UK reached a 56 month high of 33.8% (or 19,173). Paul Everitt, chief executive at the Society of Motor Manufacturers and Traders, said: "The scrappage incentive scheme has had a positive impact on car production with one in three cars built in the UK last month for the home market and total volumes starting to stabilise. However, underlying demand remains weak and the recovery is still extremely fragile. A continuation of the scrappage incentive scheme through to the original close date of 28 February 2010 would help to sustain growth and bridge uncertainties associated with the ending of VAT discount." The continued fall in commercial vehicle output – down 48.5% to 4,821 in August and down 62.7% at 56,571 for the year to date – reflected ongoing weakness in the market, Everitt added. "Specific action is needed to address business confidence and encourage investment in new business vehicles."