Road pricing 'threatens car sales'

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The Independent Online

Motor industry chiefs warned yesterday that the Government's road pricing plans could affect new car sales as UK registrations fell for the fifth consecutive month.

Motor industry chiefs warned yesterday that the Government's road pricing plans could affect new car sales as UK registrations fell for the fifth consecutive month.

Sales in May declined by 3.4 per cent compared with the same month last year to 187,900, according to figures released by the Society of Motor Manufacturers and Traders. For the year to date, registrations are down by 6 per cent at 1.069 million.

Christopher Macgowan, the chief executive of the SMMT, maintained that the car industry was proving resilient despite weakening consumer confidence and the short-term problems associated with the collapse of MG Rover, which recorded just 314 sales last month, giving it a market share of less than 0.2 per cent.

But he warned that the Government's road pricing proposals, which could result in motorists being charged up to £1.34 a mile to drive on the most congested roads, could hit sales. "Charging may well have a role in managing demand on our congested road network but it must not lead to an increase in the tax take from the motorist," he said. "Any plans to change driving habits will only succeed if government delivers an improved infrastructure and a credible, cost efficient public transport network."

Diesel-engined cars accounted for 37 per cent of sales - their highest monthly share so far this year - whilst convertibles also increased in popularity, accounting for a record six per cent of registrations in May.

SMMT officials pointed out that the slowdown in May, although in line with expectations, was the smallest decline recorded so far this year and compared with a very strong month in 2004.

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