New car registrations are expected to slip below 2.2m this year, making it the smallest market since 1997. Disappointing October sales have forced the SMMT to revise its previous bullish forecast of 2.225 million down to 2.185m.

Dealers say the shrinking market is due to customers waiting for the new year before placing orders. There is still a lingering belief list prices could fall further, particularly since major players such as Renault and Peugeot have still to make a move.

However both companies had a successful October and, with exchange rates heavily stacked in their favour, are happy to hold out until the fuss dies down. The Renault Clio jumped to No3 in the October top 10. Renault Megane and Peugeot 206 have sold consistently well all year.

There is also clear evidence of reduced pre-registering in the market. Although the SMMT's announcement of only 125 pre-registered cars in September was widely derided, the sales pattern in October suggests carmakers are leaving only a few dealers to push false numbers to hit sales bonus targets.

October started strongly and was running 16% ahead of the same month last year after the first week. It then dropped away steadily and the usual final push failed to materialise. The month ended 2.6% up on 1999, despite the initial surge.

The year-to-date total is 1,961,296, down by 0.93% but the industry is more concerned about the picture over the past three months. Registrations for August to October are down 5.1% and order books are not looking healthy.

The SMMT tried to put a positive spin on the figures, seizing on a 14% increase in retail customers. But October 1999 was a dreadful month for private sales, coming at the height of the 'rip-off Britain' campaign and extensive press coverage of the Consumers' Association stance.

Both major volume sellers, Ford and Vauxhall, lost sales in October. Ian Coomber, Vauxhall sales director, said there was some evidence of customers holding off for Vectra price cuts and the company also has Corsa on run-out.

Ford has been similarly hit by the new Mondeo launch but has been under pressure all year. Ford dealers say retail customers are still hard to find – Focus sold 9,013 units in October, of which 7,184 (80%) were to fleets. There are no figures available for how many were sold to small business customers.

Typical retail and user-chooser companies – such as Fiat, Citroen and Honda continue to do well. Citroen said its Xsara Picasso outsold Renault Scenic in the month while Fiat is scoring well with the new Punto. Honda's growth is based on the 5dr Accord which has been well received in the medium fleet sector.

Perhaps not surprisingly, Daewoo sales stumbled for the first time since the brand was launched in 1993. Sales were down 33% in the month but the company remains 11% ahead on the year as a whole.