News

Commercial vehicle production dropped by a colossal 63% in the first quarter of 2009, according to the latest SMMT figures.

Production numbers for the UK market fell by 75.6%, while export numbers fell by 46.4%.

Paul Everitt, SMMT chief executive, says: "The figures show that urgent action is necessary to kickstart demand in the motor industry. It has an essential role in the UK's economic future, but it will be some months before  we see any significant increase in output."

In last week's Budget, the government announced a scrappage scheme designed, in part, to stimulate demand for commercial vehicles. Under the scheme, anyone trading in a car or van that is at least 10 years old and no more than 3.5 tonnes will be offered £2,000 towards a new vehicle. The scrappage scheme will operate from mid-May until March 2010, or until the £300m of government funding dedicated to it has run out.

The fall in commercial vehicle production was reflected in figures from Scania, which reported a decline in pre-tax profit of a massive 90%, with sales falling by 28%.

Leif Ostling, Scania CEO, predicts there will be no change in demand for vehicles in the coming quarters.

He says: "Practically all markets where Scania has operations  are characterised by low economic activity due to the turbulence in the financial markets and its impact on the real economy."

The company recently announced 2,000 job losses.