4% decline in new car sales dashes hopes of recovery

SALES of new cars fell 4 per cent in September from a year earlier, dashing hopes that sales for 1992 would match those achieved last year.

Sales last month fell to 121,823 from 126,906 in September 1991, according to the Society of Motor Manufacturers and Traders. Full-year sales are put at no more than 1.56 million against last year's 1.59 million cars.

A spokesman for the SMMT said there was no reason to believe the situation would improve until there was a general economic upturn. This message will be conveyed to Conservative Party delegates at a breakfast in Brighton this week.

In the first nine months of 1992, new car sales fell 2.62 per cent to 1.297 million from 1.332 million in the same period last year. The gloomy picture was exacerbated when sales failed to live up to expectation in August, traditionally the strongest month because of the new registration letter.

Last month, the recession in the home market forced Rolls-Royce and Ford to cut 2,500 jobs. The SMMT said further short-time working might have to be introduced by members. However, further job losses were unlikely as the industry was pared to the bone.

Car makers are hoping that a weaker pound will come to their rescue by bolstering exports. Until now, overseas sales have helped offset difficulties in the home market, but these are also experiencing a severe downturn.

The SMMT said the situation in September could have been much worse had the Government not changed rules on the sale of cars without catalytic converters.

New cars without 'cats' were not supposed to be sold after 1 January 1993 and some prospective buyers were thought to be holding back in the hopes of a pre-Christmas bargain. However, the deadline has been shifted to September 1993, removing the incentive to delay purchases. An estimated 40,000 new cars without converters could have been left unsold at the end of the year.

The SMMT is concerned that many customers expect a special deal whenever they choose to buy. 'Often the industry is blamed for price wars, but it seems we have grown to become a discount-seeking nation,' a spokesman said.

So far this year, the UK's top-selling cars are the Ford Escort, Ford Fiesta, Vauxhall's Cavalier and Astra. Although the Ford Sierra takes fifth place for the nine months, it fell into sixth place behind the Rover 200 series in September.