New car sales fell sharply last month compared with January 2008 in another sign of the slump hitting the motor industry, new figures showed today.
The 30.9 per cent fall was the biggest monthly figure since 1974, said the Society of Motor Manufacturers and Traders.
A total of 112,087 new cars were registered in the UK in January. The SMMT stepped up its call for the Government to offer financial aid to owners of older cars to help them buy newer models under a so-called scrappage incentive scheme.
SMMT chief executive Paul Everitt said: "There is a clear need to stimulate demand for new vehicles in the UK market. A number of EU member states have launched scrappage incentive schemes, which have the benefit of boosting consumer confidence and delivering significant environmental improvements.
"The UK motor industry is urging the UK Government to introduce a similar scheme and help sustain jobs and businesses throughout the sector."
The SMMT said the new car market continued to decline "sharply" at the start of 2009, with consumers remaining concerned that the general economic gloom would impact upon them directly.
"With jobs being lost, consumers appear unwilling to spend on large discretionary items like cars," said the society.
The new car market is expected to decline by 19.3 per cent in 2009 to 1.72 million, 410,000 fewer than last year and 685,000 down on 2007, it was estimated.
All segments of new cars showed a fall in January, except the mini segment, which was up 40.8 per cent.
The new Ford Fiesta was the top selling model for a third successive month in January.
Howard Archer, chief economist at Global Insight said: "Sharply deteriorating car sales provide further clear evidence that consumers are very reluctant to spend, particularly on major costly items.
"This reinforces the belief that consumers are likely to cut back markedly on their spending this year.
"Consumers face sharply rising unemployment, muted and slowing income growth, very tight credit conditions, substantially lower house and equity prices, increased debt levels and hits to their pensions.
"On top of this, many consumers are retrenching out of choice, reflecting deep concerns about the economy and jobs.
"These factors seem sure to hit consumer spending hard through 2009, outweighing the support coming from more competitive pricing by retailers, the VAT cut and lower interest rates."