New car registrations in Europe's second-biggest auto market have fallen for seven months in a row, according to industry data, hit by weaker consumer confidence and uncertainty over possible future levies on diesel cars.

Lookers said it now expected sales would fall by around 5 percent this year, the first annual decline since 2011.

At the start of 2017 it expected demand to match 2016's record 2.69 million sales but in August it revised that to forecast a 3 percent drop.

The chain, which sells vehicles for almost all major brands including Volkswagen, Ford and BMW, said manufacturers were cutting sales targets by on average around 10 percent to reflect the cooling market.

"Our key manufacturer partners recognise the more difficult trading environment and are taking pragmatic and supportive actions such as reducing targets, increasing tactical incentives and helping us to reduce operating costs," the firm said in a statement.

Although Lookers said it would still meet full-year expectations thanks to the particular range of models it sells, Chief Executive Andy Bruce told Reuters that the Brexit-induced fall in the pound had hit demand.

Most of the cars sold in Britain are imported and several car firms have passed on some of the extra cost of bringing in their vehicles to consumers since sterling depreciated by around 15 percent in the wake of the Brexit vote in June last year.

"That direct impact on the exchange rate has impacted the volumes and of course then the more indirect impact on consumer confidence," Bruce said. "There's quite a lot of negative news out there at the moment."

(Reporting by Costas Pitas; Editing by Alistair Smout and Susan Fenton)

By Costas Pitas