As per Society of Motor Manufacturers and Traders' figures, the production of new cars in UK fell 43% in May from the same month in the previous year.

According to the industry group, 67,754 cars were produced in May. In the year-to-date, the total number of cars produced was 319,022, which is 54 % lower than the previous year.

As far as the production of commercial vehicles is concerned, it dropped 73.5%.

Numerous firms decided to trim down the production of cars for the time being, after economic recession hit demand for new vehicles.

Speaking on the topic, Paul Everitt, SMMT chief executive, said, "Prompt action by manufacturers to realign supply with demand has been painful, but was necessary.

There is now a direct link between demand in the marketplace and production volumes."

In order to augment demand for cars, buyers have been offered a discount of £2,000 on a new car if they scrap one that is at least 10 years old.

Figures depict more than 60,000 orders for cars under the country's scrappage subsidy scheme.

Fifty per cent of the discounted amount is being paid for by the govt., with manufacturers contributing the rest.

Nevertheless, restricted finance and low business confidence, played its vital role in trimming down the demand for commercial vehicle sector.