While car sales continue to rise in India and China, sales of new cars in the UK fell for the fifth in-a-row in November, and are expected to fall further in the coming months due to increase in value added tax (VAT) and public sector spending cuts.
New car registrations were 139,875 in November, a decline of 11.5 per cent compared to November 2009 figure, the Society of Motor Manufacturers and Traders (SMMT) said.
However, the SMMT said that the decline last month was not as steep as had been anticipated and it predicts total sales will exceed 2 million this year.
The SMMT said that the new car market remains 3.4 per cent up over the first 11 months of the year at 1,907,029 units, which was aided by the recovery in fleet volumes that was up by 10.7 per cent over the year to date.
''New car registrations fell by less than expected in November with demand from the fleet sector helping to offset the market rebalancing following the end of the Scrappage Incentive Scheme," said Paul Everitt, SMMT chief executive.
But the sluggish UK car market is likely to take a further hit next year due to the increase in VAT to 20 per cent and the government public spending cuts take effect.