New car sales in October 2008 suffered their biggest monthly year-on-year fall for more than 17 years.
And motor industry leaders predicted that annual sales in 2009 would dip below the two million mark for the first time since 1995. The number of new UK registrations in October 2008 totalled 128,352 - a 23.05% drop on the October 2007 figure, the Society of Motor Manufacturers and Traders (SMMT) announced.
The October decline was the worst year-on-year monthly drop since June 1991 when sales crashed 31.2% compared with June 1990.
Last month's figure followed hefty falls in purchases in August and September this year, showing just how hard the credit crunch is biting.
The year-to-date sales for 2008 now total 1.92 million - an 8.7% drop on the January-October 2007 figure.
The SMMT has now revised its whole-year sales forecast for 2008 down to 2.15 million vehicles - nearly 11% down on 2007.
The prediction for 2009 is even gloomier, with the SMMT reckoning that sales next year could fall to 1.92 million.
A recently as 2003, that annual total was as high as 2.58 million. Annual sales' figures dipped as low as 1.5 million during the recession of the early 1990s, with 1995 (1.94 million) the last time the two million figure was not reached.
SMMT chief executive Paul Everitt said today: "October has proved another difficult month for the UK motor industry and action is needed to help restore consumer confidence and encourage buyers back to the showrooms.
"Cuts in interest rates that are swiftly passed on to consumers, scrapping planned increases in vehicle excise duty (car tax) and maintaining public expenditure on new vehicles are essential parts of the package required by industry.
"There is also a clear role for European action to support continued investment in new, lower carbon vehicle technologies."
Paul Kenny, general secretary of the GMB union, said: "These figures demonstrate that the recession is well and truly with us and is now taking hold.
"The Government needs to take measures to stop things getting worse, such as bringing forward public sector projects as quickly as possible."
The only hopeful signs last month were that diesel sales reached a record 45.6% of the market and the mini segment was the only class of car to show any growth.
Sales of private cars dipped nearly 29% last month, with business sales going down 43.6% and fleet sales decreasing by 16.3%.
Vauxhall knocked Ford off the best-selling car of the month spot, taking top spot with its Corsa model, although the Ford Focus is the best-selling car for the period January-October 2008.
Luxury car companies were among the worst-hit for sales last month. No Daimlers were registered at all in October 2008 compared with five in the same month last year, while Cadillac purchases slumped from 104 in October 2007 to just eight last month.
Despite publicity connected to the new James Bond film, Aston Martin sales dipped from 164 in October last year to 110 last month, while only 87 Bentleys were sold last month compared with 166 in October 2007. Alfa Romeo sales slipped from 631 in October last year to 360 last month while 38 Lotus cars were registered last month compared with 58 in October 2007.
Other dips in sales included Land Rover (down nearly 58%), Renault (down nearly 54%) and Mitsubishi (down more than 47%).
But some companies did manage to buck the downward trend. Jaguar sold 1,404 cars last month - a 22.41% rise on the 1,147 figure for October 2008.
A total of 2,340 Volvo vehicles were registered in October 2008 - up 23.5% on the 1,897 figure for the same month last year, while Dodge sales in October 2008 rose 10% to 264.
The sales slump has promoted a number of UK-based car companies to cut back on production to match the decrease in demand.
Today, German car giant BMW announced that production of the Mini was to be cut, with workers at plants at Oxford and Swindon being told the two-week Christmas shutdown is to be extended to four weeks this year as a result of the credit crunch.
The news is the latest blow to the industry following an announcement earlier this week by Jaguar Land Rover that a voluntary redundancy scheme is to be extended to hundreds of workers.
Roger Maddison, national officer at the Unite union, said: "We understand the very difficult economic conditions car manufacturers are facing.
"We have robust agreements in place to protect our members as much as possible during these difficult times. However, we remain vigilant and we are keeping a close eye on developments in the car industry."
These were the top 10 sellers in October 2008:
1. Vauxhall Corsa
2. Ford Fiesta
3. Vauxhall Astra
4. Ford Focus
5. Volkswagen Golf
6. Ford Mondeo
7. BMW 3 Series
8. Vauxhall Zafira
9. Peugeot 207
10. BMW 1 Series.