Car and commercial-vehicle production plunged by 47.5% and 56.7% respectively in December, contributing to falls of 5.7% and 5.9% for the year, says the Society of Motor Manufacturers and Traders.
Chief executive Paul Everitt said: "UK vehicle production figures for 2008 demonstrate both the strength of the sector and the very dramatic fall in demand in the last quarter.
"UK facilities are globally competitive with high productivity levels and hugely attractive model line-ups. Exports account for 75% of all UK vehicle production, serving more than 100 markets around the world.
"The automotive industry is of strategic economic and social importance, reflected in the measures to support the industry being discussed by governments across Europe and around the world.
"The SMMT has been in close discussion with the UK Government on the urgent need to improve access to credit and kick-start demand in the market, in order to sustain valuable industrial capability during this exceptionally difficult period.
"SMMT is looking forward to meeting with Lord Mandelson before the end of January to receive the Government's response to the proposals we submitted at our November meeting."
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