Latest figures from the Society of Motor Manufacturers and Traders (SMMT) have revealed a 31.5 per cent decrease in car production for August.
The figures showed that 56,737 cars were built in the
So far this year, car production has fallen by 44.6 per cent with commercial vehicle production down 62.7 per cent.
The SMMT has urged the government to extend the scrappage scheme to next February following fears that the fund would run out by the end of next month.
The scheme, which allows new car buyers to receive a £2,000 discount when scrapping a vehicle more than 10 years old, has been praised for boosting vehicle production of new cars over recent months.
Paul Everitt, chief executive of the SMMT, said: 'The scrappage incentive scheme has had a positive impact on car production, with one in three cars built in the UK last month for the home market and total volumes starting to stabilise.
‘However, underlying demand remains weak and the recovery is still extremely fragile. A continuation of the scrappage incentive scheme through to the original close date of 28 February 2010 would help to sustain growth and bridge uncertainties associated with the ending of VAT discount.
‘The continued fall in commercial vehicle output reflects ongoing weakness in the market. Specific action is needed to address business confidence and encourage investment in new business vehicles.'