New car sales declined in July, the first drop in a year, according to data released by the Society of Motor Manufacturers and Traders (SMMT).

A drop in private registrations compared to the scrappage-fuelled months of 2009 was expected
There were 136,446 new car registrations last month, a decline of 13.2% from a year ago. The SMMT have attributed this decline to the end of the car scrappage scheme and the fragility in the economy.

"A drop in private registrations compared to the scrappage-fuelled months of 2009 was expected," said Paul Everitt, the SMMT's chief executive.

"Subdued consumer confidence and a still-fragile economic recovery make the outlook for the remainder of 2010 challenging, but a stronger-than-expected first half means full year volumes are still forecast to exceed 2009's total."

Last year, just fewer than two million new cars were sold in the UK, with the car scrappage scheme significantly boosting sales following its introduction in May.

The scheme came to an end in March this year and helped to sell at least 330,000 cars. The SMMT said the outlook for the car industry in 2010 remained "difficult to predict".