The British car industry has recorded its worst August since 1966 after sales of new cars slumped by 18.6 per cent over the year.

According to the Society of Motor Manufacturers and Traders (SMMT), sales of new cars fell to 63,225 as decided against making “big ticket” purchases as the economy slows and credit conditions tighten.

Total new car registrations have fallen by 3.8 per cent in the year to date.

Howard Archer, chief UK and European economist at Global Insight, said: “Even allowing for the fact that August is typically a quiet month for the car market due to the number plate change in September, this was very worrying.”

He added: “Sharply deteriorating car sales is a further clear sign that consumers are increasingly cutting back on their spending.”

The SMMT now expects new car sales to fall by around 10 per cent in the final four months of the year and has revised its forecasts down to 2.26 million sales this year and 2.16 million next.

The three best selling models in August 2008 were the Vauxhall Corsa, the Ford Focus and the Vauxhall Astra.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts