New car registrations dropped by 2.8 per cent in February following a decline in the sales of diesel vehicles, according to the industry trade body.
The Society of Motor Manufacturers and Traders (SMMT) said sales reached 80,805 last month, a 2.8 per cent drop on the previous year.
While demand for petrol and alternatively fuelled vehicles (AFVs) continued to rise by 14.4 per cent and 7.2 per cent respectively, demand for diesels fell by 23.5 per cent. The growth for petrol and AFVs has been unable to offset the decline in demand for diesel, which now sits a 35.6 per cent market share.
SMMT chief executive Mike 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."
Chancellor Philip Hammond announced in his budget last year that from April 2018, diesel cars that fail to meet the latest standards will move up by one tax band, and the existing diesel supplement in company car tax will rise by one per cent.
Hawes added that he expected a "further softening" of sales in March. This time last year buyers rushed to get their new cars registered before the increase in vehicle excise duty hit in April 2017.