New car registrations in August fell 17.5 per cent year-on-year to 55,305, according to the Society of Motor Manufacturers and Traders (SMMT).
It is the second consecutive monthly decline and the SMMT believes the trend will continue through to the end of the year.
The decline came in advance of the introduction of the September ‘60’ plate, and the market for newly registered cars is expected to fall by around 10 per cent this month, from 367,929 units last year.
Despite that, over the first seven months of 2010 the market remains 13.2 per cent above 2009 at 1,300,413 units.
The full year forecast suggests 2010 registrations will finish at around two million, representing a 1.2 per cent increase on 2009.
The market is forecast to slow from the current annual running rate of 2.146 million units to 2.018 million by the end of the year.
Paul Everitt, SMMT chief executive, said: “New car registrations were down 17.5 per cent in August and conditions will remain challenging through the rest of the year.
“The industry enjoyed a better than expected first half of the year and, despite the difficulties, SMMT is forecasting that new car registrations will close just ahead of 2009 figures.”
Diesel-fuelled cars saw their market share reach another all-time high of 52.6 per cent during August.