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UK car industry faces a difficult 2010

The Society of Motor Manufacturers and Traders (SMMT) has today issued a statement suggesting that the UK car industry faces a difficult 2010 after production in 2009 fell by 30% compared to 2008. The number of new cars produced in 2009 was a 25 year low for the UK industry with only 999,460 new cars produced over the 12 month period. So what does the future hold?

The concern which many car manufacturers have is the fact that the UK government is set to take away the car scrappage scheme after the next 80,000 orders have been taken. This could well induce a massive fall off in demand although due to a running down of new car stocks in 2009 we could actually see an increase in new cars manufactured in 2010. However, unless the UK economy powers ahead in the short to medium term there will almost inevitably be pressure on pricing with many UK motorists becoming used to the benefits of the car scrappage scheme.

In many ways it is one step forward and two steps back for the UK car industry which has been in terminal decline for over 20 years. There had been hopes that the car scrappage scheme would herald a new era for the sector but 2010 is set to be another challenging year for the industry.

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