The number of cars built in Britain slumped 60% last month as manufacturers slammed the brakes on output. Just 65,647 cars and vans rolled off production lines compared with nearly 110,000 in February 2008, according to the Society of Motor Manufacturers and Traders (SMMT).
This is the biggest fall since 1970 and the fifth month in a row that output levels have been in reverse. The grim figures were released 24 hours after the industry scrapped the British International Motor Show due to take place in London next year.
SMMT chief Paul Everitt said canceling the show was a tough decision but stressed it would be revived in future. “The global credit crunch has placed the industry under unique pressure and created a level of uncertainty that deters manufacturers from committing to large-scale international events.” In January, Business Secretary Lord Mandelson announced a £1.3billion package of support for the car industry.
But manufacturers have been pressing for more help from Government to stimulate demand. In particular they would like to see the introduction of a “banger bonus” which would give drivers an incentive to ditch older, high-polluting motors for new models. Without this they fear it may be so long before sales pick up that thousands more jobs will be lost.
Earlier this month, Toyota’s 4,500 UK workers agreed a 10% pay cut, expected to last a year, as an alternative to redundancies. The firm has already halted production for an extra two weeks due to the lack of buyers. Honda has taken even more drastic action mothballing its Swindon factory until June. 60% fewer cars were built in Britain in February.