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New car registrations plummet again in July

The new car market is the latest sector to be hit by the financial downturn after vehicle registrations plunged yet again.

Just 3,278 new cars were registered in July compared to 3,723 in the same month in 2010, a drop of almost 12%. So far this year 31,609 new cars have been registered, compared to 36,779 this time last year - a fall of just over 14%.

Figures released by the Society of Motor Manufacturers and Traders (SMMT) showed that UK-wide new car registrations fell 3.5% in July to 131,634 units.

The market was down 6.7% over the year to date, with the 13th successive monthly decline in volumes.

Motoring journalist Jim McCauley of the Ulster Motoring Writers Association said that the decline can be attributed to a number of factors including the financial downturn, the holiday season and cost-cutting drivers downsizing.

"The first thing to remember is that this is July and people are getting away on holidays and spending their money on getting away, rather than on cars," he said.

"The second is of course the economic situation and indeed fuel prices which are making people downsize or even stop driving completely."

However, Paul Everitt, SMMT chief executive, said robust demand in the fleet sector helped to bolster weak private demand.