UK car sales slumped to their lowest level since 2000 last year as buyers were battered by rising interest rates and fluctuating fuel costs, according to the Society of Motor Manufacturers and Traders.

Total sales fell 3.9% to 2.3m units and the SMMT is forecasting 2007 will be an equally tough year for the industry.

December saw sales plummet almost 15% to just below 134,000 vehicles compared with December 2005 when registrations were boosted by fleet buyers getting in ahead of changes to company car tax.

"2006 was by no means an easy year for the motor industry and the fall in new car registrations comes as no surprise," the SMMT's chief executive Christopher Macgopwan said.

"Uncertainty fuelled by factors like interest rate rises, political instability and fuel price fluctuations conspired to make the market place a difficult one.

"Although we can expect another tough 12 months ahead, that is not to say that it is all doom and gloom - 2007 promises a host of new models along with the potential for attractive showroom offers to tempt the buyer."

The Ford Focus was the top selling model for the eighth year in a row.

Diesel sales hit a record 898,521 vehicles, taking more than 38% of the UK market though that still lags the European average, which is around the 50% level.

Sales of 4x4 vehicles fell 6.2% to 175,805. The SMMT blamed the decline on changes to three top selling 4x4s; the Land Rover Freelander, Honda CRV and the Toyota RAV4, with buyers holding off until the new models became available.

"I think rumours of the 4x4's demise have been a bit exaggerated," said an SMMT spokesman.

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