BRITAIN Car companies are being hammered by a fall in sales. New-car registrations dipped 23% in October, with sales for the year now forecast to be 2.15m vehicles, down from last year’s 2.4m. Most UK carmakers have laid off staff, cut back working hours and are planning long shutdowns over Christmas.

“It is the worst we have ever seen,” said David Smith, chief executive of Jaguar Land Rover. “And it has been a sudden and sharp drop. After Lehman Brothers collapsed, we saw a rapid fall-off,” he said.
    
Smith is one of a group of industry leaders seeking a meeting within the next 10 days with Mandelson, Geoff Hoon, the transport secretary, and Treasury ministers.

Excise duties on larger cars are to be increased in April. The increase will also apply to some secondhand cars.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said a reprieve on the duty increases would help consumer confidence. “It would send out the right signal – and it is also the right thing to do for the government because, as we have explained to them before, the increases as framed do little to help the environment.”

Smith urged the government to adopt a German scheme that gave incentives to companies to encourage them to renew old fleets. Subsidies are available for those who want to get rid of vehicles that are more than eight years old.

“Not only would it help stimulate demand but it would get more fuel-efficient cars on the road,” said Smith.

The SMMT has written to Darling asking him to support a proposed €40 billion loan package from the European Investment Bank, which will be discussed on December 2. It would make cheap loans to carmakers to help pay for the development of low-emission vehicles. A similar programme has been made available in America.

Detroit is likely to receive more direct assistance. GM, Ford and Chrysler have begun talks about a “bridge” loan from Washington that would ease their immediate cash problems. Ford and GM said last week they burned through about $7 billion (£4.5 billion) each in the last quarter, with GM warning it did not have enough reserves to last it through next year.