Car production in the UK slumped by almost 60 per cent in January as demand for new vehicles evaporated amid the deepening recession, the Society of Motor Manufacturers and Traders (SMMT) announced today.

Only 61,404 cars were manufactured last month,a fall of 58.7 per cent compared with the same month last year, while commercial vehicle production dropped by 59.9 per cent, the industry body said.

“Following extended winter shutdowns, vehicle output continued to fall in January in line with expectations,” Paul Everitt, the SMMT's chief executive, said.

“The extent of the decline highlights the critical need for further government action to ease access to finance and credit.”

The majority of cars made over the month — 83.5 per cent — were allocated for export as UK demand tails off, the SMMT said.

The figures came as the UK’s largest union warned the Government of the “imminent” closure of a car factory that employs 100,000 people, which would have a “devastating” effect on the economy.

Tony Woodley and Derek Simpson of Unite held a “crisis meeting” with Alistair Darling, the Chancellor, to call for more financial support for the industry. They told him that manufacturing would not recover from the recession unless “urgent assistance” was given to the UK’s car industry.

Mr Simpson called for a £13 billion fund to be made available to struggling manufacturers.

In recent weeks carmakers across the country have announced a series of job cuts after they forced employees to take extended Christmas holidays.

BMW has said that it was reducing its Mini workforce at Cowley, Oxford, by 850 and cutting production, while 1,200 jobs are to be cut at Nissan’s plant in Sunderland.

Aston Martin is axing 600 jobs at Gaydon in Warwickshire while GKN, the car and aircraft parts company, is shedding more than 500 jobs and Honda has shut its Swindon plant for four months.

Ford, Jaguar Land Rover, Bentley and Toyota, which has just announced a pay freeze for staff, have all announced either job losses or production reductions.

There are also fears that there could be redundancies among workers at Vauxhall’s UK plants affter an announcement by the company’s US parent General Motors that it is to cut up to 47,000 workers worldwide

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