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The UK new car market fell for the 12th month in a row in March, with registrations down 15.7% year on year.
The decline was driven by a steep drop in diesel registrations, which fell by 37.2% compared with March 2017.
The Society of Motor Manufacturers and Traders (SMMT) pointed out that March 2017 was the biggest month ever for new car registrations, as buyers rushed to beat new vehicle excise duty rates that came into force in April last year, and that March 2018 was still the fourth best March on record.
Helping to offset the decline in diesel registrations, the market for petrol cars rose by 0.5%, while the number of alternatively fuelled cars registered rose by 5.7%, including an 18.2% rise in demand for plug-in hybrids.
The fall in overall demand was fairly uniform across different types of buyers, with private registrations down 16.5%, fleet registrations down 15%, and business registrations (to fleets with less than 25 vehicles) down 14.3%.
For the year to date, the new car market is down 12.4% compared with the same period in 2017.
SMMT chief executive Mike Hawes said: "March's decline is not unexpected given the huge surge in registrations in the same month last year.
"Despite this, the market itself is relatively high with the underlying factors in terms of consumer choice, finance availability and cost of ownership all highly competitive.
"Consumer and business confidence, however, has taken a knock in recent months and a thriving new car market is essential to the overall health of our economy.
"This means creating the right economic conditions for all types of consumers to have the confidence to buy new vehicles."
Hawes added that the government should incentivise drivers to have new cars rather than retain older models.
He said: "All technologies, regardless of fuel type, have a role to play in helping improve air quality whilst meeting our climate change targets, so government must do more to encourage consumers to buy new vehicles rather than hang onto their older, more polluting vehicles."
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