UK new car sales fall for 2nd month

Sales of new cars in Britain fell 17.5% in August from a year ago, falling for the second consecutive month following the end of an incentive scheme to scrap old models, the Society of Motor Manufacturers and Traders said on Monday.
The market will remain tough for the rest of the year, the SMMT said, but it forecast that registrations over 2010 will total two million, up 1.2% on 2009.
Jointly funded by the government and industry, the scrappage scheme offered motorists 2,000 pounds to trade in cars more than a decade old for more fuel efficient methods. It closed earlier this year after starting in 2009.
"New car registrations were down 17.5% in August and conditions will remain challenging through the rest of the year," said Paul Everitt, SMMT chief executive.
"The industry enjoyed a better than expected first half of the year and, despite the difficulties, SMMT is forecasting that new car registrations will close just ahead of 2009 figures.
The Ford Fiesta was the best-selling model last month and is also the top-selling car in 2010.
August was expected to be the most sluggish month for car sales before the launch of new "60" licence plate for cars registered in September. The SMMT said 55,305 vehicles were sold in August.
However, the September sales figure is expected to be around 10% lower than last year when almost 368,000 models were sold. It will be closely watched for signs of the impact of a cooling economy and impending government spending cuts.
"Private sales are likely to be limited appreciably by the serious pressures facing households. These pressures will make consumers' very careful about splashing out on as big-ticket an item as a car," said Howard Archer, economist with IHS Global Insight.
"The substantial fiscal squeeze will increasingly hit public sector jobs and consumers' pockets, while households already face high unemployment, muted earnings growth, elevated debt levels and high fuel prices," he added.
"It is likely though that some car sales could be brought forward in the latter months of 2010 from 2011 as purchasers look to beat Value Added Tax rising up from 17.5% to 20% in January."