New Car Sales Hit By Credit Crunch

The total number of new car registrations last month, which will be released by the Society of Motor Manufacturers and Traders (SMMT), is expected to be as much as 25% down compared with the same month last year.

The October fall follows a 21% fall in in sales in September when even the start of the new 58 registration period plates failed to halt the downturn in purchases.

August had seen what was described bt many industry commentators as the largest monthly year-on-year fall for around 40 years. It has to be said however, that until 1999 the August figures had been vastly inflated as it the only new number plate month before a switch to a twice annually system in force at present in which the plates change in both March and September.

The figures released tomorrow will give a very clear indication of just how badly the recession and uk credit crunch is already hitting consumers.

In the early 1990s, following excellent sales in the late 1980s, new car purchases fell for 27 successive months this at a time when house prices were falling and consumer confidence was low, which all goes to indicate that we are in a very similar cycle.

It was the upturn from this trend in the mid 1990's that showed the world that the "first green shoots" of an economic recovery were beginning to show above the surface.

New car sales had held up relatively well until fairly recently, which would suggest that  consumer confidence has been severely dented, it is expected by many that some of the year-on-year comparisons will reveal big declines in the coming months.

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