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Penalising diesel cars will harm Britain’s car plants and lead to lost jobs, the head of the UK’s motor industry group has warned.

Almost half the vehicles that roll off British lines are diesel, and their continued production is “essential for future growth and employment”, according to Mike Hawes, boss of the Society of Motor Manufacturers and Traders.

The latest figures from the body, published on Thursday, show that the UK made more cars in March than any other month since 2000.

Production last month rose 7.3 per cent to 170,691 vehicles, with exports rising 10.6 per cent to 130,838. Some 224,849 of the cars made were diesel — 6.7 per cent higher than a year ago.

MR Hawes said: “A large proportion [of the cars] are the latest low emission diesels, and it’s essential for future growth and employment that we encourage these newer, cleaner diesels onto UK roads and avoid penalising consumers who choose diesel for its fuel efficiency and lower CO2 emissions.”

Last year 788,865 diesel cars were made in the UK, accounting for 45.8 per cent of the output.

Britain is also a major manufacturer of diesel engines for export, with Ford making diesel engines at its Dagenham plant, while BMW has the capacity to make diesel engines at Hams Hall.

A sharp fall in demand for diesel cars would pile additional pressure on UK car plants, which are already facing uncertain future trading conditions following Britain’s departure from the EU.

Diesel became popular with consumers across Europe due to its high fuel economy, while carmakers embraced the technology because its lower CO2 output compared to petrol helped them hit emissions targets.

Many motorists also bought diesel vehicles believing them to pollute less than petrol equivalents.

Public and regulatory backlash against the fuel, however, has been gathering pace following the revelations from Volkswagen in late 2015 that millions of its diesel cars were fitted with cheating software that masked their real-world pollution levels in laboratory tests.

Several cities across Europe, including London, are considering banning or heavily penalising diesel cars in city centres.

In the UK the government is proposing a scrappage scheme to get older, more heavily polluting diesel vehicles off the roads.

The SMMT has been campaigning to highlight the merits of newer diesel technology, which it claims is cleaner than old variants.

This week the lobby group said that 96 per cent of commercial vehicles in Britain run on diesel and estimated the fuel contributes £26.4bn to Britain’s economy, from delivery vans to emergency services.

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