New car sales in the UK are likely to have plummeted to their lowest level for 17 years during October.
Official SMMT figures, due to be released tomorrow, are expected to show an overall fall between 23 and 25 percent, the steepest decline since 1991.
In September, new car sales fell dramatically by 21 per cent year-on-year. October is expected to reveal a worsening decline. Luxury car brands and SUVs will have likely been worst hit with consumers unable to get credit and running costs a bigger concern than ever.
Tremors from the credit crunch are being felt around Europe. Sales of new cars in Germany - Europe’s biggest economy - fell 8 percent in October, while in Spain they were down 40 percent.
Yesterday it was revealed that Jaguar Land Rover would cut up to 400 more jobs at its UK factories. The Indian-owned firm’s managing director David Smith today called on the government to cut interest rates by 1 percent.
“We need a real shock to the system,” said Smith.
In recent weeks there have been lay-offs at Bentley’s Crewe facility, which had been operating a three-day week for months. Nissan’s massive Sunderland factory has non-production weeks scheduled, and Ford’s Transit plant in Southampton has cancelled shifts.
British car-makers including Jaguar Land Rover are calling on the government to emulate the US and offer substantial loans and investment in developing greener cars to help shore up the industry.
A similar package of ‘soft loans’ is being considered by the European Union, spurred on by the French government and Peugeot-Citroen.