LONDON (Bloomberg) — UK car sales fell the most in 28 years last month as a looming recession and tight credit discouraged consumers from making large purchases.

Registrations of new cars dropped 37 percent to 100,333 from 158,735 a year earlier, the seventh consecutive monthly decline, the London-based Society of Motor Manufacturers & Traders said yesterday in a statement.

"Urgent action is now required to ease access to credit and finance, both to support consumers and meet the cash-flow needs of the industry," SMMT chief executive officer Paul Everitt said in the statement.

The seizure in credit markets and an approaching recession cut demand in the UK, prompting Honda Motor Co., Japan's second-largest automaker, to suspend manufacturing in England in February and March to reduce output. Jaguar and Land Rover, the UK automakers owned by India's Tata Motor Ltd., plan to eliminate jobs in central England. Last month, the SMMT cut its 2008 sales forecast by 4.9 percent to 2.15 million vehicles.

The UK economy, Europe's second-largest, may contract by 1.1 percent next year, the most since 1991, the Paris-based Organisation for Economic Cooperation and Development said on November 25. Gross domestic product fell by 0.5 percent in the third quarter, the first drop in 16 years.

The society, representing carmakers including General Motors Corp. and Toyota Motor Corp., sent a letter to Alistair Darling, the UK Chancellor of the Exchequer, and held talks with Peter Mandelson, the secretary of state for business, to ask for tax cuts and increased spending to support the domestic car industry.

Some consumers may have delayed purchases in order to take advantage of a cut in value-added tax that began on December 1. The VAT reduction will probably reduce the average price for a car by 250 pounds ($363), the industry association said.

UK car sales declined in November across all sales segments and fuel types, with small cars performing best. Dearborn, Michigan-based Ford Motor Co.'s Ford Fiesta was the best-selling model. Eleven-month sales declined 11 percent to 2.02 million vehicles.