Wheels in motion on production lines?

Posted on 19 Jun 2009 by The Manufacturer

Car production is still falling but the pace of decline is slowing, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

Image: Ford plant, Dagenham

Production fell 43 per cent in May – the smallest drop in 2009 so far. However, production of commercial vehicles – vans, trucks, lorries – continues to suffer heavily and fell 73.5 per cent in the fifth month of the year.

The SMMT said automotive firms are beginning to restart their lines after widescale shutdowns now that stockpiles are easing and initiatives like the scrappage scheme begin to boost sales.

“Prompt action by manufacturers to realign supply with demand has been painful, but was necessary. There is now a direct link between demand in the marketplace and production volumes,” said Paul Everitt, SMMT chief executive. “The scrappage schemes in place across Europe are now beginning to have a positive impact, although the full benefits will take a little longer to flow down to companies at all levels in the supply chain.”

He said commercial vehicle production is still suffering because businesses are waiting for an all round economic upturn before committing to expenditure.