UK car production rises 65%

Car production in the UK increased in January, rising 65% from the same month last year, according to data released by the Society of Motor Manufacturers and Traders (SMMT).

This is the biggest year-on-year increase in monthly production since May 1976. Just over 100,000 cars were produced in January, up from 85,316 in December.

There are fears in the industry that when the car scrappage scheme - which offers a £2,000 incentive to scrap old cars and buy new ones - ends next month production will drop off. It is estimated that the scheme has been responsible for about a fifth of all new car registrations since its introduction.

However, the SMMT chief executive Mr Everitt has said that he he expected the recent recovery to continue, despite the ending of the UK scrappage scheme.

"SMMT expects a modest recovery in 2010 output as economic growth, a competitive exchange rate and the introduction of innovative new models to UK plants help to lift manufacturing levels above those seen in 2009," said Mr Everitt.