Car sales in Britain fell to their lowest level since 2000 last year and 2007 looks set to be another tough year for the industry, according to the Society of Motor Manufacturers and Traders (SMMT).
Industry experts, however, argue that tough times on the forecourt offer opportunities for consumers to save money.
The SMMT's figures, published yesterday, showed that UK registrations, which cover both private and fleet purchases, fell 3.9% compared with 2005 to almost 2.35m. That was still the sixth highest on record but short of the peak of almost 2.58m in 2003.
SMMT's chief executive, Christopher Macgowan, said: "2006 was by no means an easy year for the motor industry and the fall in new car registrations comes as no surprise. Uncertainty, fuelled by factors like interest rate rises, political uncertainty and fuel price fluctuations, conspired to make the market a difficult one."
December figures showed a much sharper decline than that recorded for the full year - down 14.7% to just under 134,000 - though the SMMT said it suffered by comparison with very strong sales in December 2005, ahead of a change in the tax regime governing company cars.
Sales of diesel cars rose to another record and now account for three out of every four 4x4 vehicles. However, that was not enough to prevent 4x4 sales falling faster than the market overall: down 6.2% at 175,805.
The SMMT said the decline was the result of the introduction of new models, with buyers holding off until the new versions become available, rather than environmental issues. "Rumours of the 4x4's demise have probably been exaggerated. This has more to do with model changes," a spokesman said.
For the eighth year in a row Britain's best-selling car was the Ford Focus, continuing the company's long-running occupation of the top slot, which stretches back to the Cortina.
Looking to the current year, Mr Macgowan said: "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."
Steve Fowler, editor of WhatCar?, urged buyers to bargain hard. List prices were increasing, especially when new models were introduced, but significant discounts could be achieved. WhatCar's average target price, which customers should be able to achieve, was more than £1,500 below list price, he said. "The tumbleweed is blowing across the forecourts as we speak. It's quiet out there," he said.
There was a similar message from Which? magazine. David Evans, senior motoring researcher, said Which? researchers were able to achieve discounts by even modest haggling.
"You should always bargain on price. Dealers set their own prices and will discount to move cars, especially when they are trying to meet contractual sales volume targets. Shop around for deals towards the end of the quarter, when dealers are keen to make the numbers work and offer discounts to do it."
Top 10 best-selling cars in 2006
1 Ford Focus 137,694
2 Vauxhall Astra 105,296
3 Ford Fiesta 103,856
4 Vauxhall Corsa 73,923
5 Renault Mégane 62,069
6 VW Golf 62,011
7 Renault Clio 57,192
8 BMW 3 Series 50,248
9 Ford Mondeo 48,021
10 Vauxhall Zafira 47,527
Source: SMMT
