New car registrations are expected to fall by up to 2.5 per cent in September, a key month for manufacturers.
With the high street downturn hitting car dealerships, the car industry trade body was remaining relatively upbeat yesterday .
The Society of Motor Manufacturers and Traders ( SMMT) is predicting a total of 420,000 new registrations in September, the second busiest month for traders after March.
That would be a fall of 2.5 per cent from the 430,763 cars that left the showrooms in September last year and a continuation of the declining sales that have been the hallmark of the industry so far this year.
Industry experts have forecast total sales for the year of 2.45 million, a reduction of 4.6 per cent from the 2.57 million seen last year, which itself fell short of the record 2.58 million registered in 2003.
Actual sales, however, are lagging industry forecasts.
The 1.47 million cars sold by the end of July lagged the first seven months of 2004 by 5.9 per cent.
The latest CBI retail survey, published yesterday painted a gloomy picture of the motor trade.
More than half the car dealers questioned for the survey (51 per cent) said they thought sales would be down in September. Just a fifth were optimistic enough to predict a rise in sales, giving a negative balance of 31 per cent.
The SMMT ' s moremore optimistic predictions are based on the fact that the recent quarter point rise in base rate to 4.5 per cent has revived consumer confidence and the competitive deals on offer from manufacturers.
Also, non-retail sales in the form of fleet and corporate deals are holding up well.
Most manufacturers will be fielding their 2006 model year specification cars, which will have the new 55 number plates compared with the 05 plates that went on sale in March.
And despite the declines seen this year, sales are still well ahead of those recorded four years ago, the SMMT points out.
However, there could be bad news just around the corner.
Estimates from the US show that soaring petrol prices are likely to have contributed to a slowdown in car sales in a market that is important for West Midlands manufacturers such as Jaguar and Land Rover.
Analysts are predicting a seasonally adjusted sales rate of about 16.9 million in August compared with a near-record
20.8 million sales in July.
Part of the problem is that the two biggest US car makers, General Motors and Ford, have been selling vehicles at deep discounts to list prices in an effort to shift old stock.
As a result, consumers have become satiated.
Back in Britain, meanwhile, evidence emerged yesterday that consumers are confused by the twice-yearly change in car number plates - even though it has been around since 1999.
Confusion centres on the seven symbol system, in which March is represented by 0 and September by 5, which was introduced in 2001, according to a survey by the Post Office.
"It's been four years since the current number plate format was introduced and still only a quarter of people actually understand what the letters and numbers mean," said Claire Oldstein, head of Post Office car insurance.
"With so many of us confused, those driving around in new cars this week might not turn as many heads as they'd like."
But despite the apparent confusion many people will still enjoy the "cachet" of driving around in a car with new number plates, an SMMT spokesman insisted.