UK registrations fell 6.3 percent to 163,615 in January as weaker consumer confidence and uncertainty over the future of diesel drove a tenth consecutive month of decline in the market.
Sales of diesel cars fell 26 percent to 58,703, giving diesels a market share of 35.9 percent, down from 37.8 percent in December.
Registrations of gasoline cars rose 8.5 percent to 95,892, giving them a market share of 58.6 percent, up from 56.6 percent in December, according to data from the Society of Motor Manufacturers and Traders (SMMT) published on Monday.
Demand fell 30 percent among business customers, 1.8 percent for fleet buyers and 9.5 percent from private customers, the SMMT said.
In 2017, UK sales recorded their biggest drop in eight years, falling 5.7 percent to 2.54 million, due to uncertainty over potential new diesel charges and weakening consumer confidence since the Brexit vote, the SMMT has said.
But demand was robust at the beginning of last year as customers brought forward purchases to beat a vehicle tax hike which came into force in April, making it likely there would be large comparative drops in the first few months of 2018.
The Ford Fiesta was the UK's best-selling car in January, pushing December's winner, the Volkswagen Golf, into second place. The Ford Focus was No. 3.
Fiat, Nissan, Ford among biggest losers
Fiat's UK sales plunged 47 percent last month, making it the biggest loser among major mass-market brands. Nissan's volume fell 30 percent, while Ford sales dropped 14 percent and PSA Group's newly acquired Vauxhall brand fell 9 percent.
Other losers included Peugeot, whose registrations fell 11 percent, and Renault, whose sales slipped 7 percent.
VW brand sales dropped 3 percent.
Among premium brands, Mercedes-Benz sales decreased 9 percent, while Audi volume slipped 1.1 percent and BMW registrations grew 6 percent.
Other gainers included Mini, whose registrations rose 26 percent, Toyota, where sales were up 7 percent and Land Rover, whose volume grew by 4.2 percent.
• Click here for January UK sales by brand
The UK's decline contrasted with sales rises in other big European markets last month. Sales in France rose 2.5 percent, while in Spain they were up 20 percent. Sales in Italy gained 3.4 percent.
Germany will announce sales figures for January this week.
Reuters contributed to this report