New figures show that overall UK registrations reversed 2.9 per cent last month to about 153,600 vehicles, compared with 158,200 in October 2017.
Registrations are down 7.2 per cent this year compared with the first ten months of last year, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).
Sales of diesels suffered another mauling last month, tumbling 21.3 per cent, year-on-year.
The SMMT said there had been a shortage of some car brands caused by backlogs at testing centres, amid tougher emissions regulations introduced in the European Union.
There has also been growing concern about the impact of diesel car emissions on air quality and uncertainty about what taxes and restrictions will be introduced on them.
Demand for alternatively fuelled vehicles (AFVs) such as hybrids and pure electrics increased by 30.7 per cent to take a market share of 6.9 per cent. This was partly boosted by the news that grants for AFVs are set to be cut, drawing forward sales.
SMMT chief executive Mike Hawes said: “Vehicle excise duty upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year so it’s good to see plug-in registrations buck the trend.
“Demand is still far from the levels needed to offset losses elsewhere, however, and is making government’s decision to remove purchase incentives even more baffling.
“We’ve always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging. We need policies that encourage rather than confuse.”
Alex Buttle, director at car buying comparison website Motorway.co.uk, said: “These latest figures suggest new car sales are entrenched at a sub-par level for the long term. The industry is gearing up for a cold, hard winter that could stretch long into 2019 and beyond.
“A fatal combo of interest rate fears, Brexit concerns and confusion over fuel types sees the industry locked in the deep freeze and in a perpetual battle to pick itself up off the floor.
“AFV sales, after spluttering a little in September, did at least get back on the right track in October, and a 30 per cent rise does suggest some cause for optimism. However, the government’s bizarre decision to cut funding towards the Plug-in Car Grant could well blunt that growth in months ahead.”
The Ford Fiesta was the best-selling model last month, following by the Volkswagen Golf and Mercedes-Benz A-Class in second and third places, respectively.