New UK new car registrations were down 2.8% in February from a year earlier, hit by another fall in the sale of diesel vehicles.
The Society of Motor Manufacturers and Traders, the industry’s trade body, said sales totalled 80,805 last month.
Demand for diesels fell by 23.5%, while sales of petrol cars rose 14.4%.
However, last month’s fall, which comes ahead of the key number plate change in March, was not as steep as the 9.7% decline seen in January.
SMMT chief Mike Hawes said the industry expected a “further softening” of sales in March.
Sales of alternatively-fuelled vehicles (AFVs) rose 7.2% year-on-year, driven by some new, smaller models coming on the market.
The strong growth in sales of petrol cars and AFVs has been unable to offset the move away from diesel, which has now slid to a 35.6% market share.
Signs of recovery?
Mr Hawes said: “Although the new car market has dipped, it remains at a good level despite the drop in demand for diesel.
“Consumers should be reassured, however, that the latest cars are the cleanest in history and can help address air quality issues, which is why they are exempt from any restrictions.”
Although car sales were down in February, some economists said there were grounds for optimism.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “February’s car registrations data suggest that new buyer demand is beginning to recover, having weakened substantially last year.”
But he added: “February usually is the second quietest month for registrations, so we shouldn’t draw strong conclusions.
“The key test of the market will come in March, when around one-quarter of all cars are registered, due to the number plate change.”