New car registrations in Britain had their worst August in more than 40 years last month, industry numbers showed.
The monthly survey showed new registrations fell an annual 18.6 per cent to record the weakest August since 1966, as the credit crunch and high fuel costs kept buyers out of the showrooms.
The Society of Motor Manufacturers and Traders said there were just 63,225 car registrations last month, compared to an average for August over the past eight years of around 75,000.
"The August market was the lowest since 1966 and accounted for a quarter of the fall in volumes over the year to date," the SMMT said. "The last three months account for 89 per cent of the drop."
August is traditionally a quiet month as would-be car buyers in Britain wait for September's change in registration number plates. Indeed, August normally accounts for only three per cent of annual volumes. Nevertheless the fall is seen as some indication of the strains being put on consumer finances as the housing market bubble bursts.
Shares in British car dealers Pendragon and Lookers LOOK fell as investors fretted the outlook for sales would remain poor for some time. Britain is far from alone in seeing a sharp fall in car demand. New car sales in Spain plunged by 41 per cent last month while Italy reported a 26 per cent slide.
Germany reported a 10.4 per cent drop and even France, which has an incentive scheme for the purchase of less polluting cars, saw its new car market slide 7.1 per cent.
The weakness contrasts sharply with the boom in car demand in Russia, where growth already outpaces Western European markets, and which is expected to overtake the German car market in volume terms next year at the latest.
"Sharply deteriorating car sales is a further clear sign that consumers are increasingly cutting back on their spending," said Howard Archer, an economist at Global Insight.
A breakdown of the UK figures by sector showed new private registrations fell 23.6 per cent, business registrations fell 36.7 per cent while fleet registrations fell 13.4 per cent.
GM unit Vauxhall's Corsa model was the best-selling car last month, outselling the Ford Focus for a second straight month.
There were also signs consumers were switching to more fuel-efficient vehicles. Diesel vehicles also raised market share with VW's Golf the best-selling diesel model both last month and in the year to date.