Paul Everitt, SMMT chief executive, said: "Our latest CO2 report shows how far we have come, but also the challenges that lie ahead.
"Industry is bringing more new technologies to market. Encouraging consumers to embrace these and choose lower-CO2 emitting variants must be our priority. However, this is not a task for industry alone; car makers, government, fuel companies and new car buyers have a role to play in delivering lower carbon motoring."
Highlights from the report, which is available to download, include:
Everitt added: “We shall be working with the Government to help shape the new car CO2 regulation, emphasising the need for appropriate lead-times, fines that are closely aligned to the market price of carbon and with suitable incentives for innovation.
“We will also be urging government to ensure that the diversity of the market and car manufacturing bases in the UK are protected.”