Consumers have put the brake on the car import business because they can now get better deals at home, it was revealed today.

A report for Autocar magazine found that domestic price cuts, faltering exchange rates and worries over import dealer quality are strangling the car import business. It added that dozens of companies had already gone out of business and more were likely to go bankrupt.

Imports accounted for 123,000 new car registrations during 2001-02 - but this year the figure is forecast to fall to 57,000 or lower as customers return to their local and trusted UK dealer, said Autocar.

"It's good news for the UK dealer network to see customers back in their showrooms," said the magazine's editor, Steve Sutcliffe. "2003 is forecast to be the second-highest sales year on record, with 2.5m registrations, so it's even better news for buyers who can get the cars they want, at a price they are happy with from the dealer they know and trust."

Douglas McWilliams, chief executive of the Centre for Economics and Business Research, commented on the report. "The margin to make money on imports is now tiny," he said.

A Virgin Cars spokeswoman supported Autocar magazine's view of a change in the market. "When we started in 2000 everything we sold was imported. Now that the exchange rate has collapsed, 80% of our business is UK-sourced," she admitted. "The only savings on imports are on Mercedes and Audis costing over £40,000."