The decline in the production of cars in the UK has slowed significantly as more people trade in old cars on the scrappage scheme.

According to the latest figures, the UK car output rate fell by 6.7% in October compared with the same month last year – the smallest annual decline of the year.

The Society of Motor Manufacturers and Traders (SMMT) posted the latest vehicle production figures Friday (20 November) which showed that the annual decline rate of new cars produced in the UK has slowed down.

In October 2009, 106,400 new cars were manufactured in the UK. So far this year, a total of 801,169 cars have been produced, which is a fall of 38.1% from last year.

Paul Everitt, SMMT Chief Executive, said: “The rate of decline in UK car production continued to fall in October, against a weak 2008.

“The scrappage scheme and early signs of recovery in global markets offer some encouragement to UK vehicle producers, but 2010 is expected to be another difficult year for the industry.”

The production of commercial vehicles continues to decline sharply, with a year-on-year fall of 39.5% compared to the same period a year earlier. Production for the first nine months of 2009 is also down to 60%.

Despite the apparent improvement in the new car market, the SMMT has asked the Chancellor to “use the pre-budget report to help sustain and strengthen recovery.”

The government announced in September this year that the car scrappage scheme, which began in May, would continue at a cost of £100 million.

The scheme allows car owners to trade in any vehicles older than ten year old for a new car at a £2,000 discount.