The government yesterday moved to boost Britain's car industry with fresh support as the domestic auto sector suffered two damaging blows.

Stephen Byers, trade and industry, said a new innovation and growth team - made up of industrialists and DTI officials - would examine ways of underpinning the UK industry. The group, to be chaired by Sir Ian Gibson, Nissan's senior vice-president, will, he said, look at medium and long-term issues facing the car sector.

Mr Byers' move came as official figures showed a near-20% fall in UK car production last month to 129,099 cars. Output for the home market fell 15.2%; that for export dropped 23.1% in what was due to be a record year for sales.

Christopher Macgowan, chief executive of the Society of Motor Manufacturers and Traders, said: "It would be wrong to view February's drop in production as part of a slide in fortunes in UK car manufacturing." He said output would climb as new investments and models came on stream.

But Ford sent a shiver through the industry by pulling out of October's biennial London motor show - the latest after BMW, Peugeot, Toyota, VW and Audi.