Best car production rise in 30 years but motor chiefs gloomy

Car production has risen sharply again year-on-year, with the Government's scrappage scheme continuing to help sales.

The number of cars produced last month was up 64.8 per cent on the total for January last year, it was announced today, the largest increase since May 1976.

Commercial vehicle production also rose - up 9.6 per cent compared with January 2009, the Society of Motor Manufacturers and Traders said.

Analysts will be closely watching the figures for this month in the wake of the potential decision by Toyota to slow or stop production at its plants as the safety scare has hit sales.

Figures from the end of 2009 were also encouraging, but motor industry leaders have warned that the year ahead will be "extremely challenging".

The next few months will show a comparative improvement because of the slump at the beginning of last year. Car production for the whole of last year was 30.9 per cent down on 2008. Commercial vehicle production fell 55.3 per cent.

In December production rose 58.5 per cent year-on-year. CV production was up 15.6 per cent — the first monthly increase for 17 months.

However, the car scrappage scheme is due to end shortly, which could cause another collapse in demand.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, has warned that car and CV production will remain well below pre-recession levels. He said it was essential there continued to be a focus on creating "more and better-priced finance for businesses and consumers".