British car sales are likely to show their sharpest fall for 17 years when figures for October are published tomorrow. The Times has learnt that sales of new cars were worse than in September, when they fell by 21 per cent, and could have fallen by as much as 25 per cent. This would be the steepest decline since June 1991.

Premium car brands and SUVs have been particularly badly hit by the falling sales in Britain, but tomorrow’s figures from the Society of Motor Manufacturers and Traders are likely to show a sharp downturn across all important segments of the market.

Though sales were reported to have hit a 40-year low in August, that data was skewed because in years gone by sales were boosted by the annual change of registration plate in that month. However, the car industry had been hoping for a boost from the six-monthly change in registration plate that took place in September.

The expected grim news for British sales comes as the car industry was hit again by job losses at Jaguar Land Rover and as BMW scrapped its forecasts because of the financial crisis.

Jaguar Land Rover, which has factories in the Midlands and on Merseyside, said that it was seeking another 300 to 400 job cuts on top of the 200 it announced last month. The company had said that the October job cuts were a normal annual efficiency move rather than a response to the economic downturn.

However, yesterday it admitted that the cuts were in response to the credit squeeze and the decline in demand.

Jaguar Land Rover, which employs about 15,000 people, is offering nine months’ salary as a pay-off and full pension for those over 60. David Smith, chief executive of the Tata-owned business, said: “While regrettable, these are necessary actions to manage our business through a very challenging period.”

Sales of Land Rovers have fallen heavily in recent months but sales at Jaguar have been boosted by the new XF model. All Jaguar Land Rover factories are on short-time working.

Mr Smith appealed for a 1 per cent interest rate cut to attempt to boost demand in the economy. He said: “We need a real shock to the system that a significant rate cut will provide.”

The company has urged the Government to follow the action of the US and offer substantial investment in green technology. President Sarkozy of France is encouraging the European Union to look at such a move.

Meanwhile, BMW, the German premium carmaker, said that it was not possible to make a profit forecast for this year because of the global financial crisis. Third-quarter pretax profits crashed 63.5 per cent to €279 million (£226 million) compared with the same quarter last year. Sales fell 8.6 per cent, to €12.6 billion.

The carmaker raised the amount that it is setting aside for vehicle residual value risk and credit risk. It added €342 million in the third quarter, bringing the total to €1.03 billion.

Norbert Reithofer, BMW chairman, said: “Difficult business conditions and the volatile climate on the market mean that it is as good as impossible from today’s perspective to make a reliable prediction of the earnings outcome for the financial year 2008.

Motoring mayhem

- Sales of new cars in Germany fell 8 per cent in October to 258,800 vehicles. The number of new cars registered so far this year in Europe’s biggest economy was virtually flat at 2.63 million

- Sales of new cars in Spain fell by 40 per cent in October to 77,660 vehicles, and registrations of new cars in Italy fell 18.9 per cent year-on-year in October to 167,940 units

- Skoda, owned by Volkswagen, said yesterday that it planned to cut production by another 18,000 cars this year. It will halt production for an unspecified number of days this month and next in its three factories

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