Car sales drop as sluggish economy hits UK demand

New car sales fell in the year to November, though not as severely as was feared according to data out yesterday from the Society of Motor Manufacturers and Traders (SMMT).

Car registrations in 2011 so far are down 4.5 per cent compared with the same period last year, at 1.82m.

However, the SMMT believes sales will reach nearly 1.94m this year, exceeding earlier forecasts of 1.92m.

Car sales are still some 20 per cent below their pre-recession levels.

The SMMT said car sales continued to be supported by growth in the fleet market and sales promotions. Fleet sales were up 7.5 per cent on the year, but private car sales were down almost 16 per cent.

Analysts said the data highlight continued low demand, as a weak economic outlook weighs on sentiment.

“The outlook for car manufacturers looks challenging, with the economy struggling markedly,” said Howard Archer from IHS Global Insight.