(Adds Mandelson quotes)
* Car production suffers record February fall, down 59 pct
* Industry pushes for German-style scrapping scheme
* Mandelson says no bail-out for struggling companies
LONDON, March 20 (Reuters) - British car production fell by a record 59 percent year-on-year in February after falling demand forced manufacturers to cut output, the Society of Motor Manufacturers and Traders said on Friday.
The industry body urged the British government to introduce cash incentives to scrap old cars, a scheme that has helped to revive the market in Germany.
The number of number of cars produced in February was 59,777, industry body SMMT said, the lowest figure for that month since records began in 1970.
Of that total, 46,617 were for export, down 58 percent on the year, and 13,160 for the domestic market, a fall of more than 62 percent.
The global economic downturn has taken a heavy toll on carmakers around the world, prompting some governments to give financial aid to the sector.
Britain is providing government guarantees for up to 2.3 billion pounds ($3.35 billion) of loans to the car industry, but the industry wants more help to stave off job losses.
"We have seen action to encourage longer-term investment, but still require government support for short-time working, easier access to finance and credit and the implementation of a vehicle scrappage scheme," said SMMT chief executive Paul Everitt.
Drivers in Germany get 2,500 euros ($3,424) if they scrap cars that are at least nine years old.
British Business Secretary Peter Mandelson said that he did not plan to rescue lame ducks.
"What I'm not going to do is to bail out companies that can't cover their costs, where their owners are not making the commitment they need to and where they are already heavily indebted," he told Sky News.
"On the other hand viable going concerns in the sector which are planning and investing for the future are to take part in this green industrial revolution that is upon us," he said during a visit to a Nissan car plant in Sunderland, northeast England.
Russian-owned van maker LDV has warned it may collapse unless the British government offers short-term funding.
The British car industry is largely foreign owned but still employs some 800,000 people, of whom 200,000 are in direct manufacturing. (Reporting by Fiona Shaikh; editing by Patrick Graham/Victoria Main; Reuters Messaging:fiona.shaikh.reuters.com@reuters.net; Tel. +44 207 542 2774)) ($1=.6865 Pound) ($1=.7302 Euro)