The global car market may still be down on the whole, but the British industry is beginning to show signs of life. The UK’s industrial output actually increased during the month of April – marking the first improvement in over a year – with a study released on Wednesday indicating Great Britain could exit its current recession by the end of the quarter.
Although not fully responsible for the recovery, the UK’s automotive sector is believed to be at least partly behind the unexpected uptick. The British government instated a £300 million scrappage law last month that is fueling new car sales. Although no data is in on Britain’s program, similar incentives boosted Germany’s car market by 40 percent.
In response to the increased demand, several car companies are boosting their UK production. Nissan has announced it will increase production at its Sunderland, England plant by 14,000 units in the coming months to keep up with surging demand, according to Automotive News.
The House just passed its own scrappage plan, but it remains to be seen if it will be as effective as those in place in other global markets. Under most European programs, eligible vehicles need only be 10 years or older. The program just approved by the House requires an eligible vehicle to achieve 18mpg or less in the combines cycle, leaving the program open mostly to trucks and SUVs.
