Which of the following year exhibited highest percentage decrease over the preceding year in the automobile production?

Total automobile production in the year 2004 = 800+500+475 = 1775

Total automobile production in the year 2005 = 700+550+450 = 1700

Total automobile production in the year 2006 = 1025+675+475 = 2175

Total automobile production in the year 2007 = 1200+650+475 = 2325

Total automobile production in the year 2008 = 1250+600+350 = 2200

We can see that production decreased only twice during the given period in the year 2005 and 2008.

Hence, the percentage decrease in the year 2005 over the year 2004 = $$\dfrac{1775-1700}{1775}\times 100$$ = 4.225 percent.

Similarly, the percentage decrease in the year 2008 over the year 2007 = $$\dfrac{2325-2200}{2325}\times 100$$ = 5.376 percent.

Therefore, we can say that option D is the correct answer.