Car sales still stuck in the slow lane

Car sales fell by 3.5 per cent in July, the 13th consecutive month of declines as economic fears takes their toll on motorists, the Society of Motor Manufacturers and Traders (SMMT) said yesterday.

Just 131,634 vehicles rolled out of British showrooms last month, some 4,812 fewer than in July 2010, taking overall sales down by 6.7 per cent over the year to date.

In part, the gloomy data can be blamed on the end of the Government's scrappage incentive, which buoyed the recession-hit market in 2009 and 2010.

But car sales are also taking a big hit as wary consumers hold off on big-ticket purchases in the face of high inflation, weak wage growth and fears over Government cuts.

Without the support from fleet sales – up by a healthy 2.1 per centin July – the outlook would be darker still. Registrations of new private cars slumped by 9.2 per cent in uly, and 17.3 per cent over the yearso far.

But SMMT chief executive Paul Everitt says car sales will hit the 2011 forecast of 1.98m, thanks to improvements expected in the second half of the year.