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Further dip in car sales expected

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Car buying is expected to mirror the current state of the economy with big falls predicted in the number of new vehicles registered during November.

The forecast of poor figures for November, due to be released by the Society of Motor Manufacturers (SMMT), follows a huge decline in new sales over recent months.

And sales are likely to continue receding into next year as hard-pressed consumers cut back on big ticket items, according to the SMMT.

August sales were down 19% compared with the same month last year, while even the arrival of the new 58-registration plates failed to kickstart purchases in September when registrations dipped 21%.

Things got even worse in October this year, with sales sliding 23% - the worst year-on-year fall since June 1991.

The declining sales have led to cuts in production as well as job losses and longer-than-usual plant closures over Christmas and the new year.

Car buying is a key indicator of economic prosperity and there are fears that the motor industry could see a repeat of the hard times of the early 1990s.

Sales had boomed in the late 1980s, with a new annual record of 2.3 million being reached. But the downtown of the early 1990s saw annual sales slump to around 1.6 million and monthly sales dipped for 27 successive months.

© Press Association 2008