New car sales down 4.2pc

New car sales fell by 4.2 per cent on the year in November to 134,027 units, although registrations may now beat an earlier forecast for this year, the Society of Motor Manufacturers and Traders said on Tuesday.

The SMMT said car registrations in the year to date were down 4.5 percent on the year at 1,822,065 units, but that they looked set to reach close to 1.94 million by the end of 2011 exceeding its earlier forecast of 1.923m

Car sales were still some 20 percent 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, as were sales of business cars.

Analysts said the figures highlighted continued weak demand from consumers and firms, as a darkening economic outlook weighs on sentiment.

"The outlook for car manufacturers looks challenging and problematic with the economy struggling markedly, and consumer and business confidence both very low," said Howard Archer, economist at IHS Global Insight.

"Increasingly worried businesses are under pressure to contain costs as the economy struggles for growth and the outlook appears ever more difficult. This increases the risk for car manufacturers that many businesses and fleet operators could delay replacing vehicles."