Just 1.83 million new cars will be registered in the UK in 2021, according to the latest prediction from the Society of Motor Manufacturers and Traders (SMMT). In January it had forecast a figure of 1.89 million.
The change comes after demand for new cars fell by 36 per cent last month compared with February 2020. Only 51,000 new cars were registered as showrooms remained shut.
Demand for diesel cars was down 61 per cent last month, with petrol models declining by 45 per cent.
Sales of battery electric and plug-in hybrid cars continued to buck the overall trend, with rises of 40 per cent and 52 per cent respectively. They took a combined market share of 13 per cent, up from 6 per cent during February 2020.
In Scotland, there was a 20.6 per cent year-on-year drop in total registration figures to 4,184, according to the Scottish Motor Trade Association.
February is generally a slow month for car sales due to many motorists waiting for new number plates to be released in March.
SMMT chief executive Mike Hawes said the decline is “deeply disappointing but expected”. He added: "More concerning, however, is that these closures have stifled dealers' preparations for March with the expectation that this will now be a third successive dismal 'new plate month'.
"Although we have a pathway out of restrictions with rapid vaccine rollout, and proven experience in operating click and collect, it is essential that showrooms reopen as soon as possible so the industry can start to build back better, and recover the £23 billion loss from the past year."
Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said it is "not all doom and gloom" for car dealerships.
"The end of lockdown is in sight and the planned reopening of non-essential retail will be a huge relief to many in the motor industry," she said. "The new registration plate launching in March will also further spur consumer purchases in the coming months, and, as consumer confidence grows, many will hope to see new car sales grow accordingly."