New car registrations fell by 36.8% in November to 100,333 units, while volumes year-to-date are down 10.7%.

The Society of Motor Manufacturers and Traders  said the slowdown was in line with generally weaker demand in the UK, although the move to cut VAT on December 1 may have deterred any end of month sales drive into December or next year. The VAT cut is likely to reduce an average car’s price by £250.

From the dealers AM has spoken to recently, November has been a tough month and the SMMT has said the slowdown is steeper than expected.

The market decline in November was across all sales types, fuel types and segments. Small cars weathered the decline better than most and reported an improved market share, whilst diesel penetration rose to a record 47% in November. Only private buyers can benefit from the temporary VAT cut and their volumes were down 45.1% in November.

The new car market is expected to be 2.1 million units this year.

The new Ford Fiesta was the UK’s best selling model in November, just ahead of the Ford Focus. The Focus remains the best seller over the first 11 months of the year.

Paul Everitt, SMMT chief executive, said: “November has been another difficult month for the motor industry and while some consumers may have delayed their purchases to take advantage of the recent VAT reductions, overall demand continues to fall.

“Urgent action is now required to ease access to credit and finance, both to support consumers and meet the cash-flow needs of the industry.”

RMIF reaction

Sue Robinson, director of the RMI national franchised dealers association (NFDA), said: "Recent Government moves to address the economic situation should help stimulate the car market as we go into 2009, but we do expect to see some improvement this December, traditionally one of the quietest months for car dealers.

"Many more will be waiting for the resulting economic stabilisation, and for credit to become more readily available before considering buying a new car."

Robinson added that the economy is unlikely to make a major recovery until banks start "lending sensibly to consumers, businesses and each other, when this happens car sales will increase again".

To download the new car registration figures for November 2008 click here.