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Will UK car production continue to improve?

The Society of Motor Manufacturers and Traders (SMMT) has this week confirmed that UK car sales are starting to recover and the fall in production numbers has improved dramatically although it is still down 16.1% compared to September last year. However, this is the lowest reduction rate in UK car production for 12 months but will it continue?

There is no doubt that the UK government's car scrappage scheme is at the centre of the ongoing recovery in the UK car industry and while the scheme has been extended into next year there are concerns about what will happen as and when it does end. In what many see as a "bribe" to UK taxpayers, the scheme has been extended to take into account an election and therefore take away any potential criticism from the UK car industry - as well as securing large numbers of jobs in the short term.

In many ways, by accident, the scheme is a win-win situation for all parties involved because not only does take it some of the older cars off UK roads, increase new car production but it has also led to an increase in VAT receipts from the car industry for the UK government - but how long will it last?

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