New car sales down 19% after motor trade suffers worst August for 42 years

The Society of Motor Manufacturers and Traders said new car registrations were down 18.6 per cent to 63,225 compared with the same month in 2007.

The organisation blamed the fall on declining consumer confidence and called on the Government to take 'sustained action' to boost the economy.

Tough job: Britons are steering clear of buying new cars due to the credit crunch

New car registrations are down 3.8 per cent in the year so far, compared with last year, but car makers expect the slide to continue to 10 per cent – or by 85,000 vehicles – by the end of the year.

SMMT chief executive Paul Everitt said: 'August is one of the quietest months for the new car market, but this year it was the lowest since 1966.'

Back then, when sales were 53,000, the top sellers included the Austin 1100 and Ford Cortina, whereas today the market is led by the likes of the Vauxhall Corsa and Ford Focus.

Interestingly, the comparison with 1966 extends beyonds sales. Then as now much of the country was basking in the afterglow of sporting success but the Labour government was in turmoil, with the economy faltering, inflation rising and the pound weakening.

A top-seller then: The Austin 1100

A top-seller now: The Ford Focus

According to SMMT's report, the new '58' plate in September is expected to slip below 390,000 sales – from 419,290 in 2007.

Based on the gloomy economic outlook, the society has revised its forecasts for the new car market – predicting 2.26million sales this year and a drop to 2.16million in 2009.

Its report notes that private buyers are staying away from showrooms, saying: 'The market continues to weaken as consumers hold off new car purchases in the face of deepening concerns over the state of the economy.' 

Mr Everitt added: 'Industry is encouraged by the growing interest in lower-carbon cars, but is concerned by the reluctance of consumers to commit to major purchases. There is a clear need for sustained action by the Government to boost the economy and restore confidence.'

Record fuel prices are also deterring buyers with the SMMT figures showing that more fuel efficient diesel models are now more popular, accounting for 43.2 per cent of all new car sales in the year to date, up by 6.3 per cent.

The Volkswagen Golf was the best selling diesel model in August. The economy is also hitting existing car owners wanting to change models.

Used car values are under more pressure than during the 1990s recession, according to EurotaxGlass's, publisher of trade price book Glass's Guide.

It said a typical three-year-old car today retains around 38 per cent of its list price – 2 per cent lower than in 1992 when bank base rates were at 15 per cent and inflation was approaching 10 per cent.

It expects used car values to fall by at 12 per cent between now and Christmas.

There was more gloom for the economy last night as Wall Street slumped by almost 3 per cent.

Fears of recession sent the Dow Jones tumbling over 320 points. The sell-off had an adverse impact on stock markets across the globe, with 2.5 per cent wiped off the value of Britain's biggest firms.

In London the FTSE 100 plunged 137.6 points to 5362.1.

Top three sellers in August 1966

Austin 1100

Ford Cortina

Mini

Top three sellers in August 2008

Vauxhall Corsa

Ford Focus

Vauxhall Astra