New car registrations fell by 11.5% in November to 139,875 units.
Despite the drop, the performance was actually ahead of the forecast predicted by the Society of Motor Manufacturers and Traders.
The new car market remains up 3.4% over the first 11 months of the year at 1,907,029 units.
Paul Everitt, SMMT chief executive, said: “New car registrations fell by less than expected in November with demand from the fleet sector helping to offset the market rebalancing following the end of the scrappage incentive scheme.
“Registrations are expected to fall next month, but demand may benefit from motorists looking to avoid the January VAT rise.
“This factor, coupled with the strength of the first half of 2010, means year-end volumes are expected to lift to over 2.03 million units, 2% up from last year. Next year will continue to be challenging as consumer spending tightens and government’s austerity measures take effect.”
Diesel car volumes rose sharply to 53% in November, coupled with the slowdown in registrations of petrol cars which benefitted strongly from last year's scrappage scheme.
Registrations of alternatively fuelled cars jumped 83.5% in November to give them a 1.3% share of the November market and a 1.1% share over the year-to-date.
The Ford Fiesta was once again the best selling new car in the month. Demand for supermini cars has weakened post the scrappage scheme, but volumes of dual purpose vehicles and MPVs continue to rise.
Despite the predicted fall in December, earlier growth in the first half of the year should ensure a net gain of around 2% to some 2.03 million units.
The market is forecast to fall by some 5% in 2011 to 1.93 million units, due to the impact of the austerity measures and notably the expected squeeze on consumer spending.