Car registrations plunge as crunch bites
Monday, 6 October 2008 12:00 AM
The credit crunch is hitting the car industry hard as consumers 'retrench'
The Society of Motor Manufacturers (SMMT) has reported the gloomy news that the number of new car registrations dropped significantly in September.
The organisation states the figure dropped by 21.2 per cent year-on-year to 330,295 over the course of last month.
August's slump was 18.6 per cent, so the problems are hitting even harder now. September is usually seen as a key month for the industry, so the SMMT sees this news as being particularly worrying.
Private car sales fell by 23.3 per cent in September to 149,510, which at least is down a little on the 26.3 per cent in August.
Howard Archer, the chief European and UK economist for Global Insight, believes these figures are a clear sign consumers are forcing themselves to cut back on unnecessary spending.
"Consumers are increasingly wary of splurging on expensive items such as cars, with tighter credit conditions not the only factor behind their decision," said Mr Archer.
Mr Archer says the main hope for consumers is a marked drop in inflation later in 2008 and in early 2009, which should boost spending power and allow the Bank of England to cut interest rates.
