Vehicole factories are knocking out cars at a much slower rate than a year ago, but the decline is slowing.

There were 106,400 cars made in October, the Society of Motor Manufacturers and Traders (SMMT) said today, a fall of 6.7%.

So far this year, 801,169 cars have been produced in the UK, a fall of 38.1% on the same period last year. The continuing impact of the scrappage scheme and a recovery in global markets is helping to prevent output levels from falling still further, the SMMT said.

It predicts “another difficult year” ahead. The decline in commercial vehicle production was more dramatic, with year-on-year figures showing a fall of 39.5%. Production is down 60% in the first nine months of the year.

In September, the Government announced that the scrappage scheme, introduced in May, would continue at a cost of £100 million. It allows motorists to trade in cars more than 10 years old in return for a £2000 subsidy on a new vehicle. The CBI is calling on the government to extend scrappage.

“The scheme cannot go on forever, but the Government should think seriously about extending it until the general election,” said CBI boss Richard Lambert.