The decline in July is the steepest since December 2006. according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
Paul Everitt, SMMT chief executive, said: “The decline in July reflects the continued deterioration in consumer confidence being experienced across the economy.
“Rising fuel and household bills, alongside falling house prices are making consumers reluctant to commit to new expenditure.”
Everitt said vehicle manufacturers were doing their bit to support customers, with new cars 22% more affordable than 10 years ago.
He said: “The industry needs the support of Government in order to encourage the uptake of lower-emitting vehicles and ultimately lower the cost of motoring for consumers.”
Ford responded to being knocked off number one spot in June with an 8.5% rise in July volumes. BMW, Kia, Nissan, and Volvo have seen the best gains over the year-to-date.
The Ford Focus just beat the Fiesta to be the number one best seller in July. Volkswagen’s Golf was the best selling diesel in both July and over the year-to-date.
Only the mini and executive segments posted growth in July.
The diesel market fell in July for the first time since February 2007. However, its market share continued to improve – at 44.3% compared with 41.2% a year ago. Year-to-date volumes remain positive, but are likely to drop as the overall market slips. Market shares should edge higher as the consumer looks for more fuel efficient options.
Demand for alternatively fuelled vehicles bucked market trends and rose by 19.4% in July to 1,479 units.
Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), believes fear of recession is causing consumers to be more frugal than is necessary: "Some of those who would have had no problem buying a new car are holding off because they feel they should be prudent. "VED changes due to come into force next year could reduce the value of some second hand cars. At the same time interest rates remain high, possibly increasing the cost of buying a new car. Many potential buyers are waiting to see what happens."
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