UK car sales sink 24 pct in April, brighter future eyed

New car sales in Britain fell an annual 24 percent in April, the Society of Motor Manufacturers and Traders said on Thursday, but it expressed optimism that a brighter future lay ahead.

Registrations in the first four months of this year were 28.5 percent lower, highlighting the impact of the recession that has put the government's strategy for dealing with hard-pressed carmakers in the spotlight.

Britain's auto industry is hoping a government-backed car scrappage scheme, announced in last month's Budget, will boost sales in the coming months.

Under the so called "cash for clunkers" scheme, Britons can trade in vehicles ten years and older in exchange for a 2,000 pound ($3,027) reduction on a newer model.

Similar trade-in schemes have been introduced in Germany, France and Italy where they have successfully invigorated new car demand.

"Today records the eleventh successive fall in new car registrations," said Paul Everitt, SMMT chief executive.

"Despite the tough conditions, industry is hopeful that its prospects will improve in the coming months and the steps it has taken will provide the basis for a sustained recovery once growth returns."

Britain's industrial strategy is under intense scrutiny as struggling carmakers lobby for more government support.

The government offered a bridging loan to struggling Birmingham-based van maker LDV earlier this week and is in talks with luxury carmaker Jaguar Land Rover on guaranteeing a more substantial amount of financing.

Weakness in the auto sector has been a key factor driving down British manufacturing output in the past year as the drop in demand has forced many plants to shut and lay off workers.