New car sales hit 12-year low

New car sales in the UK dipped to their lowest annual level since 1996 last year with the motor industry now facing "unprecedented challenges", the Society of Motor Manufacturers and Traders (SMMT) has announced.

Total new registrations reached 2,131,795 in 2008 - 11.3 per cent down on the 2007 figure, said the SMMT. The figure could have been even worse if the December 2008 new-car total of 108,691 had been as bad as feared.

But the SMMT forecast that annual sales, which were as high as 2.4 million in 2007, would slip to around 1.78 million in 2009 - the lowest total since 1992.

SMMT chief executive Paul Everitt said further government action was needed to help the motor industry while franchised dealers' leaders also called for action so that consumer confidence could be boosted.

Friends of the Earth said the government should only give financial support to the car industry if companies guaranteed they would play their part in cutting UK carbon dioxide emissions.

Few manufacturers managed to buck the trend of declining sales but the Smart car company, which produces low-emission, "green" vehicles, was able to report a 43.3 per cent rise in purchases in 2008. Jaguar and Kia also sold more cars last year than in 2007.

Mr Everitt said: "The global economic downturn, precipitated by the crisis in the international banking and finance sector, created unprecedented challenges for the UK automotive industry in 2008.

"The measures taken by the government to support the banking sector and kick-start demand have been necessary, but are not yet sufficient to restore confidence.

"Further action to ease access to finance and credit across the economy is essential if long-term damage to valuable industrial capability is to be avoided.

"The industry faces these challenges stronger and more resilient than in recent memory. The extraordinary circumstances we currently face mean that government support will be required to take advantage of global economic growth when it returns."

Sue Robinson, director of the Retail Motor Industry Federation's National Franchised Dealers Association, said: "The full-year new car sales figures for 2008 clearly show that demand was strong until consumer confidence dropped sharply during the final few months of the year as a result of worsening economic conditions.

"This highlights how important it is for government to enact measures to help boost confidence."

Taking last year as a whole, diesel sales fell for the first time since 1999 - dipping 4 per cent. But diesel still accounted for a record share of the overall market, up from 40.2 per cent in 2007 to 43.6 per cent in 2008.

Private sales were down 14.7 per cent for the whole of 2008. For December alone, diesel sales slipped 18 per cent and private sales were down 23.7 per cent.

Demand for smaller cars outweighed that for larger vehicles in 2008, with the mini segment the only one to record any growth.

The two biggest-selling companies - Ford and Vauxhall - suffered lower-than-average falls last year - 7.58 per cent and 9.78 per cent respectively.

The release of the figures comes at a time when car companies have cut production, and jobs, to match the lack of demand. A number of plants have extended the length of their Christmas and new year shutdowns.

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