The number of cars made in Britain in July declined by 17.9% year-on-year to 107,635 units. However, the rate of decline is now slowing.

In the first seven months of the year car production was down by 45.8% to 518,375 units. A number of plants stopped production altogether in the first half of this year but have restarted after an inventory adjustment.

There has also been some lift to orders from higher demand across Europe caused by scrappage incentive schemes.

"The slowdown in the rate of decline of UK car production reflects the impact of the scrappage incentive schemes in place across Europe," said Paul Everitt, SMMT chief executive.

"The UK motor industry is starting to stabilise but remains fragile. Industry needs government to deliver support through the Automotive Assistance Programme and encourage banks to provide access to much needed finance and credit."
However, commercial vehicle production in Britain showed a strongly adverse trend in July with output 60% down on last year at 8,440 units. Year-to-date, CV output stand at 51,614 units, some 63.8% below the first seven months of last year.

"The commercial vehicle market is suffering from depressed demand across Europe. This continues to affect the level of CV production," said Paul Everitt.

"Furthermore, high stock levels mean that vehicle production may not recover as fast as the market."