UK car sales fall at fastest rate since 1991

According to the Society of Motor Manufacturers and Traders (SMMT), car sales in the UK fell last month at their fastest rate since 1991.

In October, new car sales were 128,352, down 23% from a year ago, reflecting the fact that Britons continue to rein in their spending as the economic downturn continues to have an impact on consumer spending.

So far this year, 1.92 million new cars have been sold, down 8.7% on the same period in 2007, according to the organisation.

SMMT added that sales of luxury cars, such as the Bentley, as well as people carriers have been hit particularly hard.

Paul Everitt, SMMT chief executive, explains that October was another difficult month for the UK motor industry.

Mr Everitt believes steps must be taken to restore consumer confidence and encourage buyers back to the showrooms.

The figures from the SMMT come as the automotive industry continues to suffer worldwide.

In the UK, production of the Mini car is to be cut back. Employees at Oxford and Swindon will have a four-week Christmas shutdown this year instead of two weeks. Meanwhile, in October, sales of the Mini were down 40% compared with a year ago.

Furthermore, it has been announced today that Japanese car firm Toyota is slashing its earnings forecast for 2008 after it unveiled much lower than expected quarterly profits.

The figures stunned analysts and Tsutomu Yamada, analyst at Kabu, said the figure was ‘far below expectations and a shocking figure‘.

Just last week, Peugeot said it will cut its 2008 profitability outlook and commence huge cuts in production.

Also last week, Chrysler announced it is to axe 1,825 jobs in the US.

Meanwhile, GKN, the automotive and aeroplane parts manufacturer, is reducing its workforce by 1,400 jobs and is to cut factory production time.

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