Car sales driven down as credit crunch forces motorists to shun showrooms

A total of 153,420 were registered in July 2008 - 13 per cent fewer in 12 months and the third successive month of falling sales, the Society of Motor Manufacturers and Traders said.

But concerns about the cost of motoring and its effect on the environment meant sales of alternatively fuelled vehicles rose 19.4 per cent last month.

Worries about the Government's controversial road-tax plans are also hitting sales, say dealers.

The number of new cars registered in July is down 13 per cent on the same period last year, according to the Society of Motor Manufacturers and Traders

A total of 153,420 new cars were registered in July 2008 - a 13 per cent fall on the July 2007 figure, said the Society of Motor Manufacturers and Traders (SMMT).

SMMT chief executive Paul Everitt said: 'The July decline in total sales reflects the continued deterioration in consumer confidence being experienced across the economy.

'Rising fuel and household bills, alongside falling house prices are making consumers reluctant to commit to new expenditure.'

He added: 'Vehicle manufacturers are doing their bit to support consumers.

'New cars are now 22 per cent more affordable than they were 10 years ago and new technology is delivering more fuel efficient motoring.

'Industry needs the support of Government in order to encourage the uptake of lower-emitting vehicles and ultimately lower the cost of motoring for consumers.'

New car sales are now down 3 per cent  for the January-July 2008 period, with the SMMT forecasting that volumes will decline 6.6 per cent  in the second half of this year.

July marked the third successive month of falling sales, with registrations down 7.4 per cent  for May-July 2008.

Car dealers urged the Government to lower interest rates and warns that the controversial changes to car tax were hitting sales.

Sue Robinson, director of the Retail Motor Industry Federation said: 'Government must reduce interest rates to boost consumer confidence.

'Fear of recession is causing consumers to be more frugal than is necessary.

‘Some of those who would have had no problem buying a new car are holding off because they feel they should be prudent.

‘A reduction in interest rates, stabilization of fuel costs, and clarification over the future cost of motoring - including road  taxes - could help to boost confidence, and the Government must act now.’

Vauxhall had ousted Ford as the company with the highest share of the market in June, but Ford enjoyed a surge in sales last month to regain its top position.

The Ford Focus topped the best-selling models' table, with the Ford Fiesta second.

Used car values will fall by at least 12 per cent between now and Christmas, according to EurotaxGlass, publisher of car-price 'bible'  Glass’s Guide.

For a three-year old car worth £5,000, this £600 drop will be almost three times the £225 decline witnessed during the same period last year.

Best-selling models in July 2008:

1. Ford Focus
2. Ford Fiesta
3. Vauxhall Corsa
4. Vauxhall Astra
5. Volkswagen Golf
6. Peugeot 207
7. BMW 3 Series
8. Vauxhall Zafira
9. Ford Mondeo
10. Audi A4