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By Avril Ormsby
LONDON, April 24 (Reuters) - British car production fell 51.3 percent in the year to March as falling demand forced manufacturers to cut output sharply, the Society of Motor Manufacturers and Traders said on Friday.
The number of cars produced in March was 61,829. Of those, 46,458 were for export, down 52.6 percent on the year, and 15,371 were for the domestic market, a fall of more than 47.2 percent.
For the first quarter as a whole, production was down 56.6 percent on a year ago, underlining just how severe Britain's manufacturing slump has been in the global economic crisis.
Data released shortly after the vehicle manufacturing figures showed Britain's gross domestic product shrank 1.9 percent in the first quarter of the year, more sharply than expected, largely due to a decline in manufacturing.
The SMMT said the 'scrappage' vehicle-exchange scheme, announced by finance minister Alistair Darling in this week's budget, would help, but it would take time for the industry to recover and called for further short-term measures.
Under the scrappage scheme, motorists can apply for a 2,000 pound discount on a new car when they trade in cars more than 10 years old. The scheme is set to run until March 2010.
The measure is worth 600 million pounds with the government putting up half and the rest matched by participating manufacturers.
The scheme is similar to one adopted in Germany and other parts of Europe, where the global economic downturn has also taken a heavy toll on car manufacturers.
"The figures show that urgent action is necessary to kick-start demand in the motor industry and the introduction of a UK scrappage incentive scheme is an important first step," said SMMT chief executive Paul Everitt.
"Efforts to restore confidence and improve access to finance, particularly for companies in the supply chain, are key to sustaining our industrial capability ... It will be some months before we see any significant increase in output."
The numbers follow a record year-on-year fall of 59 percent in February, when 59,777 cars were produced -- the lowest figure for that month since records began in 1970.
The British government, wary of the tens of thousands of jobs that rely on the motor industry, has already said it will provide guarantees for up to 2.3 billion pounds of loans to the car industry.
The industry had hoped the government would finance the entire scrappage subsidy, and has called for other short-term boosts such as easier access to finance and credit.
Thousands of British carmaking jobs have already gone in the past six months, including 1,200 at Nissan. (Reporting by Avril Ormsby and Christina Fincher; Editing by Mike Peacock)