The SMMT maintained the new car market was healthy. Even so, retail customers are continuing their 'buyers strikes' and many stayed away from showrooms during July.
The latest registration figures from the SMMT reveal a 14.4% drop in sales to private buyers during the month and a 5.7% drop in the year so far.
But the industry is generally optimistic that the second half of the year will be better. Dealers believe there is now a pent-up demand for new cars which will be released by the September plate change and the end of uncertainty about prices.
Alan Pulham, NFDA director, said it was vital carmakers gave a clear message on prices. That would enable dealers to regain the 11,000 new car sales to private customers lost so far this year, he said.
The market was rescued from total collapse by another strong performance in the business sector cars bought with company money but into fleets of less than 25 vehicles.
This was 33% up in the month and 30.7% higher year-to-date. Insiders say many of these sales are genuine, though there is still some evidence of preregistering. Small businesses are taking advantage of some extraordinary deals which are being offered through corporate sales departments.
These allegedly include up to 35% off Renault Laguna (which is now on run-out); around £4,500 off a Mercedes E-class and an extra 5% trading bonus for BMW dealers on 3 Series.
The market swing is also affected by the fact that July last year was hugely inflated by preregistered cars. Carmakers are now beginning to hold back in the knowledge they will soon have to openly declare the figures they have always managed to hide.
Dealers say customers are more aware of the September plate change than they were last year and waiting lists are starting to build for the more popular models. Demand for the Peugeot 206 is still strong and the car is now the fifth best seller this year, the highest place Peugeot has ever achieved.
Other strong sellers last month included Fiat Punto (which always does well at this time of year thanks to fleet replacement cycles), Renault Megane and Ford Mondeo again a July favourite.
The Ford-Vauxhall battle to be UK number one is evenly poised. In the past Vauxhall has outsold Ford during July but failed to do so this year. But Vauxhall's sales for the year are up 2.8% while Ford is down more than 5%.
With new Corsa coming in the next six months, the gap is expected to close still further.
The introduction of the Fabia allowed Skoda to double sales in July and take its year-on-year sales up by 16.8%. For the first time ever, the SMMT was able to blame an increase in the proportion of imported cars registered on vehicles arriving from the Czech Republic.