UK new-car registrations dropped 5.8 percent in August, making another step back for the industry after signs it was climbing out of a coronavirus-driven sales slump.
The decline, based on data released by the Society of Motor Manufacturers and Traders, follows the UK's first monthly sales gain of 2020 in July.
While the UK's dip mirrors declines in Europe's other top markets, the longer-term trend remains unclear because August is typically one of the year's quietest months.
"What seems far more significant is the outlook for September and beyond, which remains positive as the industry continues its recovery from lockdown," Ian Plummer, director at sales site Auto Trader, said in a separate release.
Plummer said consumer visits had increased more than 30 percent in August from a year earlier, and order books at dealers signal "a promising September."
July's growth had been driven by pent-up demand as well as commuters looking for alternatives to public transport. There was some optimism that the bump would extend to August if school reopenings and freedom from months of lockdowns reinforced the trend.
Dealer discounts and attractive financing rates, along with a license-plate changeover that occurs each September, may indeed trigger a resumption in growth, Plummer said.
That, he said, "will be the true measure of the health of the new car market."
The SMMT has previously warned that uncertainty about the economy and the UK's exit from the European Union would continue to weigh on automakers.
Last month, Jaguar Land Rover, the country's largest automaker, said it would slash costs by 2.5 billion pounds ($3.3 billion).
One bright spot for the industry has been electrified vehicles. Their sales have more than doubled over the past year and automakers now have 83 plug-in hybrid and full-electric models on sale in the country, the SMMT said.
Registrations of full-electric vehicles rose 77 percent last month, almost doubling the powertrain's market share, while plug-in hybrid sales jumped 221 percent, more than tripling market share from the same month in 2019 to 3.3 percent.
Diesel sales fell 40 percent last month to a 16.4 percent market share, while gasoline registrations fell 15 percent to give the powertrain a 56.6 percent share.
The SMMT is seeking government incentives to be reintroduced on plug-in hybrids to get more buyers to switch, as well as binding targets on charging infrastructure.
"If the UK is to become a global leader in the drive to net zero, we need industrial as well as market transformation," SMMT CEO Mike Hawes said in the release. "This will require a bold strategy to retain and grow our automotive manufacturing base and attract new investment."