UK new car registrations declined by 3.4% last month – unusual as March is one of two 'plate change' months.
As expected, the Society of Motor Manufacturers and Traders (SMMT) blamed political and economic uncertainty and "continuing confusion over diesel" for the slump.
"March is a crucial month for the new car market, as the plate change drives buyers into showrooms, with new car demand often seen as a bellwether for consumer confidence and the health of the wider economy," SMMT said in a statement.
Demand fell in both the private and business sectors, with registrations down 2.8% and 44.8% respectively, while fleet demand was stable, up 0.3%.
Declines were seen across almost every vehicle segment, including popular Dual Purpose (1.8%) and small family cars (4.0%). However, superminis – think Ford Fiesta or Vauxhall Corsa, Britain's favourite vehicle type – saw a 4.3% increase in demand, taking a third (33.7%) of all registrations.
Following the trend of recent months, diesel registrations fell 21.4% while petrol demand grew 5.1%. Meanwhile, demand for alternatively fuelled vehicles (AFVs) increased by 7.6% with 25,302 registered, the biggest March volume to date.
With almost 40 plug in models on the market in the UK, and over 20 more expected to arrive in 2019, demand for such new technology is expected to continue to grow.
Mike Hawes, SMMT chief executive, said: "March is a key barometer for the new car market, so this fall is of clear concern. While manufacturers continue to invest in exciting models and cutting-edge tech, for the UK to reap the full benefits of these advances, we need a strong market that encourages the adoption of new technology. That means supportive policies, not least on vehicle taxation and incentives, to give buyers the confidence to invest in the new car that best meets their driving needs."