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Rocky road ahead for car industry

Land Rover were one the surprise success stories of 2010, but there are signs of a rocky road ahead for the industry.

The car giant is in the pink after seeing a 28% increase in new UK sales. Figures released by the Society of Motor Manufacturers and Traders say 35,847 more new cars overall were sold last year compared to 2009 - a rise of 1.8%.

However, the SMMT's figures also contain concerns – new UK car registrations plummeted by 18% in December - a fall to just 123,000 vehicles.

It has led to fears that car sales will fall by as much as 5% this year, which are backed up by the the bigger picture of 2010 - volumes up 19.9% in the first half but falling 13.8% in the second half.

The figures reflect the removal in March of Labour’s scrappage scheme, introduced to boost the motor industry during the financial crisis.

While over 100,000 cars were registered through the scheme in 2010, around 5% of the total market, private registrations fell below one million vehicles.

The SMMT believes that commercial vehicle sales will continue to do well but dealerships will have a torrid time as a result of the VAT increase and high petrol prices.

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