Page last updated at 12:31 GMT, Thursday, 5 February 2009

Car sales fall further in January

The Hummer has not proved popular in the UK so far this year

The number of new cars registered in the UK in January declined 30.9% year-on-year, according to industry figures, worse than December's contraction.

The Society of Motor Manufacturers and Traders (SMMT) said the number of cars registered fell to 112,087 last month.

The news comes after the government recently outlined a package of support for the UK car industry that could be worth up to 2.3bn.

Car firms have been hit by falling demand amid a wider economic slowdown.

"There is a clear need to stimulate demand for new vehicles in the UK market," said Paul Everitt, SMMT's chief executive.

In December new cars registered in the UK fell by 21.2% year-on-year.

source: SMMT (January 2009 figures)

He also called on the UK to take similar steps to other European countries, including Austria, Germany and Portugal, who have given car owners financial incentives when they scrap old cars, usually those which are nine years old or more.

"The UK motor industry is urging the UK government to introduce a similar scheme and help sustain jobs and businesses throughout the sector," Mr Everitt added.

The trade group predicts that the UK car market will shrink by a fifth this year to 1.72 million units.

Several car firms have had to cut jobs and reduce workers' hours in response to slowing demand.

On Thursday Ford said up to 850 UK workers at the firm would be offered voluntary redundancy packages.

And workers at Vauxhall car plants in Ellesmere Port and Luton are taking a cut in pay after agreement was reached to cut their working hours.

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