Car production fell 59 per cent last month as manufacturers continued to respond to falling demand. Only 59,777 cars were made last month, according to the Society of Motor Manufacturers and Traders.

Worse still, production of commercial vehicles plunged 71.6 per cent in February to just 5,870. Total vehicle sales were down 60.6 per cent to 65,647 in February and are down 59.7 per cent in the year to date, with more than 300,000 units lost from total vehicle output in the past 14 months.

Paul Everitt, SMMT chief executive, said that the large fall was a direct result of weak demand and called for the Government to do more to support the industry and make access to finance and credit easier.

He also called for the implementation of a vehicle scrappage scheme, under which motorists would be paid to trade in their old cars for more eco-friendly models.

The latest illustration of the car market’s woes comes just a day after next year’s British International Motor Show was cancelled as car makers found themselves unable to commit to the London event because of market conditions.

However, Lord Mandelson, the Business Secretary, said this morning that the manufacturers could not only survive but thrive if they take the right decisions now.

Speaking ahead of a visit to the Nissan car plant in Sunderland, he said the industry needed to cut back in response to its former over-supply and over-production in the face of extreme loss of demand, and also invest in future markets and products.

He noted that the industry’s survival was important, given its place as the cornerstone of the manufacturing sector and a huge employer, and that the Government had created an assistance package.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive