Friday, UK's Society of Motor Manufacturers and Traders or SMMT reported that car production declined 51.3% year-on-year in March, after falling a record 59% in February. In March, 61,829 cars were produced.

The motor industry has an essential role in the UK's economic future, but it will be some months before we see any significant increase in output, the SMMT said.

Vehicle sales are falling sharply on deteriorating consumer confidence and credit crunch. To enhance demand Chancellor Alistair Darling announced in the Budget on April 22, a car scrappage plan that will give motorists a GBP 2,000 discount to trade in vehicles, which are ten years old. The scheme will be implemented next month. Germany had announced a similar scheme earlier.

The figures show that urgent action is necessary to kick-start demand in the motor industry and the introduction of a UK scrappage incentive scheme is an important first step, SMMT chief executive Paul Everitt said.

Year-to-March, car output declined 56.6% from the three-month period a year ago and totaled 183,010.

In March, car exports, which were 75.1% of the total, were down 52.6% year-on-year. While in the March quarter, car exports declined 55% on-year.

For the home market, cars produced numbered 15,371 in March, down 47.2% from last year. In the first three months, production for the domestic market fell 61.6%.

Overall vehicle production fell 52.1% year-on-year in March and 57.4% in the first quarter.

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