The economic crisis is being blamed for a sharp drop in the number of new car registrations.
According to the Society of Motor Manufacturers and Traders (SMMT), just 63,225 new cars were registered last month – making it the worst August since 1966.
The number of new cars registered was 18.6% lower than in August 2007, and there has been a 3.8% drop in new car registrations over the year to date.
The SMMT said consumers are losing confidence, and is urging the government to kick-start the economy.
‘The slowdown in the UK mirrors the difficult conditions being experienced across the main European markets,’ said chief executive Paul Everitt.
‘There is a clear need for sustained action by government to boost the economy and restore confidence.’
August is traditionally a quiet month for car dealers, with many drivers waiting for new registration plates, which are released in September, before buying.
But projections show registrations for the ‘58’ plate will fall below 390,000 in September – compared with 419,290 for the same month in 2007.
The SMMT is hoping the number of sales will be boosted with attractive deals and offers.
Despite two successive months of falling sales, diesel vehicles improved their market share again in August, from 41.4% to 44.3%.
So far this year, diesels account for 43.2% of new car sales. It’s thought consumers are opting for them to avoid spiraling fuel costs.
Demand for alternative energy vehicles fell in August, down 25.7% on last month, but it remains up by 5.7% over the year to date.
Not all sectors have been affected badly. The demand for smaller, more efficient cars has led to a boom in supermini sales, which are up 37.1% for the year to date.
One of these, the Vauxhall Corsa, was the most popular model last month, but overall the slightly larger Ford Focus remains the top-selling car of 2008, with more than 73,000 units sold.