The car industry yesterday cut its forecast for sales of new vehicles in the UK this year amid unpromising economic signals.
Registrations slipped by 2.1 per cent to 162,097 in January, according to figures from trade body the Society of Motor Manufacturers and Traders.
With only one month of the year gone, the organisation trimmed its 2008 forecast to 2.345 million units, a reduction of 2.5 per cent over 2007, which itself ended 2.5 per cent up on 2006.
"We expect a modest fall in registrations this year, and a 2.1 per cent dip in January is in line with expectations," SMMT chief executive Paul Everitt said yesterday.
Concerns remain over consumer spending and confidence following the global squeeze on credit and most analysts expect economic growth to slow to about two per cent this year, the SMMT said.
January's fall in headline registrations masked a 10 per cent rise in registrations of diesel-powered cars, which took 45 per cent of the market.
The 4x4 and MPV segments also saw an increase in volumes over January 2007 with the SMMT pointing out that they were leading the way in reducing Co2 exhaust emissions, with cuts of 20 per cent and 24 per cent respectively since 1997.
That was reflected in the fact that Land Rover was one of the few manufacturers to buck the trend with a two per cent increase in registrations to 3,327 vehicles in January.
The Solihull off-road specialist set a third successive global sales record last year and is widely believed to be facing a prosperous future under its new owner, who is expected to be announced in the next few weeks.
Indian conglomerate Tata, which already owns the ex-British Steel business Corus, is the front runner to buy Land Rover and its West Midland sister company Jaguar from Ford for about £1 billion.
Jaguar is expecting big things from its new medium saloon, the XF, which will go on sale in the UK on March 1 and in the US in April.
And the Big Cat badly needs a boost after seeing its sales slump by 45 per cent to just 757 cars in January.
Much of that decline, however, is accounted for by the run out of the XF's predecessor model, the S-Type.
Jaguar has so far received more than 8,000 advance orders for the XF from customers throughout the world and former prime minister Tony Blair was yesterday said to have one on test.
Dealers throughout the UK will be showing off the new car "in the metal" in their showrooms for the first time from tonight.
BMW's Mini brand suffered a rare reverse last month, with registrations eight per cent adrift at 2,516.
Toyota, which builds models for European markets at Burnaston, near Derby, was 11 per cent down at 8,487 and Honda, which has a plant at Swindon, saw a two per cent fall to 7,734 units.
In contrast, Nissan, which recently announced a big new investment at its Sunderland plant to meet booming demand for its Qashqai model, gained 30 per cent with 4,666 registrations last month.
Separately, the SMMT has hit out at increases in the new car registration fee, which was set at £25 when it was introduced in 1998 and which has doubled since then.
The fee is due to rise from £50 to £55 from April 1, a move that will generate an estimated additional £11 million for the Treasury.
"We hope this is not a move by the Treasury to plug holes in its finances," Mr Everitt suggested.
"In the grand scheme an extra £11 million in tax and a fiver for new car buyers might not sound like much. However, we fear that this every-little-helps approach could be the basis for further changes to motoring taxes in March's Budget."