By Christina Fincher

LONDON (Reuters) - New car registrations in Britain had their worst August in more than 40 years last month, industry numbers showed on Thursday, adding to what was already a gloomy week for Europe's car producers.

The monthly survey showed new registrations fell an annual 18.6 percent to record the weakest August since 1966, as the credit crunch and high fuel costs kept buyers out of the showrooms.

The Society of Motor Manufacturers and Traders said there were just 63,225 car registrations last month, compared to an average for August over the past eight years of around 75,000.

"The August market was the lowest since 1966 and accounted for a quarter of the fall in volumes over the year to date," the SMMT said. "The last three months account for 89 percent of the drop."

August is traditionally a quiet month as would-be car buyers in Britain wait for September's change in registration number plates. Indeed, August normally accounts for only 3 percent of annual volumes. Nevertheless the fall is seen as some indication of the strains being put on consumer finances as the housing market bubble bursts.

Shares in British car dealers Pendragon (PDG.L: Quote, Profile, Research) and Lookers LOOK. fell as investors fretted the outlook for sales would remain poor for some time.

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Britain is far from alone in seeing a sharp fall in car demand. New car sales in Spain plunged by 41 percent in August while Italy reported a 26 percent slide.