Sales of new cars in Britain fell last month at their sharpest rate this year as the drop in consumer confidence reached the showrooms.

Large and high-powered cars were the worst hit as motorists took fright at the spiralling cost of fuel.

According to the Society of Motor Manufacturers and Traders (SMMT), new registrations fell 6.1 per cent in June compared with the same month last year, with 209,190 vehicles sold.

The fall is relatively modest compared with declines in America and Europe, but some marques took heavy hits.

As the figures were released, Pendragon, the car dealership, said it had cut 500 jobs and that market prospects were difficult to forecast.

High-powered and fuel-hungry brands saw big contractions with Bentley, the British-based luxury marque owned by Volkswagen, falling 38 per cent and Porsche dropping 51 per cent.

At Land Rover, now owned by Tata of India, sales plunged 29 per cent, and sales of Lexus, Toyota's luxury division, tumbled 30 per cent.

Paul Everitt, chief executive of the SMMT, said: “We are seeing concerns about rising fuel bills and household costs dampening consumer confidence, leading to slower demand for new cars. This slowdown is not unexpected but signals an increasingly tough retail environment.”

However, he said that buyers were able to choose from more smaller, lower-emission cars developed in response to environmental concerns.

For the year to date, new car registrations have fallen 1.6 per cent. After recently revising down its forecasts, the SMMT expects the market to end the year nearly 3 per cent down compared with 2007.

The new car market performed better than expected in the early part of the year. Diesel cars continued to sell strongly against the weak market as fuel efficiency and lower tax rates - because of lower carbon dioxide emissions - proved a draw for buyers. Sales of diesel vehicles rose 4.5 per cent last month, taking their share of the market to 42.8 per cent.

The best-selling diesel last month was BMW's Series 3.

The SMMT said it was concerned about the prospect of higher inflation. It said that new car prices were not matching the headline rate of inflation, despite higher raw material costs and increased spending on environmental measures, because of tough competition between manufacturers.

Last month, Vauxhall took the top two places in the list of ten bestselling cars for the first time for eight years. Its Corsa model was the bestselling car in June, with 10,238 sales, followed by the Astra with 9,952 sales.

Top-selling cars this year to date

Ford Focus 61,826
Vauxhall Corsa 55,169
Vauxhall Astra 54,774
Ford Fiesta 51,854
Volkswagen Golf 36,179
Peugeot 207 32,748
BMW 3 Series 29,096
Vauxhall Zafira 26,300
Vauxhall Vectra 26,125
Mini 24,166

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