UK car production soars 23.5%

Domestic car manufacturing rose by almost a quarter in February.

UK car manufacturing rose by 23.5 per cent in February, according to figures released by the Society of Motor Manufacturers and Traders. Production rose to 138,296 cars, strongly ahead of the same month last year. The revival for the motoring industry was driven by the UK expansion of Jaguar Land Rover and Nissan, the country's biggest car manufacturers.

Land Rover's Merseyside factory is working around the clock to keep up with demand for the popular Evoque model and its total production rose by 33 per cent to 238,237 in 2011. In the same period, Nissan production rose 13.5 per cent to 480,485. Car makers have promised £4bn of new UK investment in the past twelve months, with Nissan and JLR announcing this week that they planned to create 3,000 new jobs.

A week before the budget, the figures provide a much-needed boost to the government's plans to rebalance the British economy. However, European car makers fear that excess output is hurting profits and have called on leaders to foster a favourable climate for continued investment. Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders urged Finance Minister George Osborne to increase Britain's competitiveness when he delivers his budget on March 21.

He said that George Osborne should use "next week's budget to deliver on its growth strategy and boost the UK's competitiveness by encouraging private sector investment in research and development in research and development, capital equipment and skills."

Britain's unemployment rate is at a 16-year-high, and the government is under pressure to boost growth while cutting the growing budget deficit.