Carmakers have reported their worst September sales figures since the twice-yearly change in registration plates was introduced in 1999.
Dealers shifted a hefty 89,000 fewer vehicles last month as sales slumped by more than a fifth (21.2 per cent) to 330.295 units, figures from the Society of Motor Manufacturers and Traders revealed.
This in the most important month of the year for the car industry, one that traditionally accounts for about 17 per cent of annual sales.
Sales fell for the fifth month running in September and are now 7.53 per cent, or 146,000 units, down at 1,794,419 for the year so far.
This year's figures made grim reading for an industry that has already cut production volumes in teeth of growing financial and economic turmoil.
The SMMT said recent news in the banking sector, a further slowdown in the housing market and rising unemployment had knocked confidence. The London-based body went on to call for immediate action by the Government.
Chief executive Paul Everitt said: “New car registrations have fallen for the fifth consecutive month and represent the most difficult economic conditions the industry has faced in 17 years.
“Government action is now needed to restore consumer confidence and boost demand in the real economy.
“The Chancellor’s pre-Budget report should set out a package of measures to boost demand for new fuel efficient cars and scrap plans for unfair increases in vehicle excise duty.”
Among West Midland manufacturers, Land Rover bore the brunt of the shift in the market away from big 4x4s. The Solihull company, which until last month was on course for its second best year ever for sales in its 60-year history, was 50 per cent off at 4,907 last month and was 24 per cent down year to date at 28,958.
However, the picture at Jaguar, which like Land Rover is owned by Tata Motors of India, was brighter.
With demand for the award-winning new XF driving events, the company bucked the trend by producing a four per cent rise in sales last month (3,608 versus 3,484 in the same month last year). Sales for the first eight months were ten per cent up at 17,046.
Interestingly at a time when the premium car segment is under such severe pressure, Jaguar last month sold eight of its Daimler Super 8 version of its flagship XJ saloon. Sales of the £81,000 car so far this year total 29 against 27 at the same stage of 2007.
The SMMT warned that a further drop of 20 per cent in new car sales in the final quarter of the year would leave full year figures at just over two million, the lowest since 1996.
Economists said the September sales figures would pile even more pressure on the Bank of England to cut interest rates this week.
In the political arena, shadow transport secretary Theresa Villiers said: “These figures are disastrous news for the car industry.
“They show that the nation’s economic problems are by no means confined to the banking sector but are spilling over into manufacturing as well.
“The Government needs to wake up to the serious problems in one of the most important parts of the UK’s manufacturing industry and ensure that the regulatory climate doesn’t make the situation worse for our hard-pressed vehicle manufacturers.”
Paul Kenny, general secretary of the GMB union, said: “This is yet more evidence that we are entering a very turbulent economic period. We are finding that jobs are being lost across British industry virtually every day.”