The warning is in sharp contrast to the enthusiastic comments made by dealers throughout this week. The Retail Motor Industry Federation said yesterday that first-week sales of 'L' registered cars were very encouraging. However, the RMIF's official forecast for the month remains unchanged at 400,000, compared with 373,000 in August 1992.
The SMMT reported a 7.03 per cent increase in July's new car sales to 35,376 from 33,051 a year earlier. Imported cars took almost 55 per cent of the market, up from 52 per cent in July last year.
July's sales figures are traditionally low, with potential buyers waiting for the new registration plates. Mr Whalen said: 'The figures do confirm, however, that sales continue to show a modest growth compared with the disastrously low levels last year.' New car sales in the seven months to 31 July were 874,411, a rise of 9.06 per cent over the same period in 1992.
Mr Whalen said car makers need an urgent upturn in overseas sales to prevent further production cuts. He said the SMMT was not calling for an immediate interest rate cut in the UK but a cut would be needed if the pace of economic recovery slowed.