The 22 per cent year-on-year fall in registrations came despite strong demand for battery electric and plug-in hybrid vehicles.
The monthly performance was the weakest since August 2013, and down 7.6 per cent against the average recorded over the last decade, due in part to constrained supply as the global shortage of semiconductors continues to undermine production volumes.
Unveiling the latest figures, the Society of Motor Manufacturers and Traders (SMMT) noted that August was one of the quietest months of the year for new car registrations ahead of the important plate-change in September.
There were 68,033 cars registered across the UK last month. The best selling model was the Ford Puma followed by the Volkswagen Polo.
Mike Hawes, SMMT chief executive, said: “While August is normally one of the quietest months for UK new car registrations these figures are still disappointing, albeit not wholly surprising.
“The global shortage of semiconductors has affected UK, and indeed global, car production volumes so new car registrations will inevitably be undermined.
“Government can help by continuing the supportive Covid measures in place currently, especially the furlough scheme which has proven invaluable to so many businesses.”
He added: “As we enter the important September plate-change month with an ever-increasing range of electrified models and attractive deals, buyers in the market for the new 71 plate can be reassured manufacturers are doing all they can to ensure prompt deliveries.”
Alex Buttle, director of used car marketplace Motorway.co.uk, said: “While new car sale numbers are still disappointing, the used car market is white-hot, with demand through the roof and sales surging throughout the summer. The contrasting fortunes of the UK’s new and used car markets have never been more stark.”
John Wilmot, director of car leasing comparison website LeaseLoco, noted: “Car buyers are stuck between a rock and a hard place at the moment.
“If they order a new car they could be waiting months to take delivery, while the used car market is seeing car prices rocketing as supercharged demand outstrips supply.
“This leaves buyers with a third option, which is holding onto their existing cars until market conditions change. But that means there will be more older, higher polluting cars on UK roads. And that’s not what the government wants if it’s hoping to meet its Road to Zero emissions targets.
“There is a clear message being sent out by UK consumers that they are keen to go green and August figures show once again there is strong demand for electric and hybrid cars.”
James Fairclough, chief executive of AA Cars, added: “After a poor July, sales of new cars continued to disappoint in August. But there is an important silver lining to the clouds currently hanging over the market - the culprit is likely to be patchy supply rather than flagging demand.
“With both the economy and consumer confidence recovering well, motorists are steadily returning to forecourts.”