The SMMT wants the government to do more to help
Sales of new cars in February were 22% lower than a year earlier, the latest industry figures have shown.
The number of new UK registrations in February was 54,359, down from 69,610 the year before, said the Society of Motor Manufacturers and Traders (SMMT).
Its latest figures come after most of the main carmakers have cut production and jobs at their UK plants as they respond to the fall in sales.
The SMMT said it was "imperative" the government did more to help the sector.
"It is imperative that the UK government increases the pace in responding to industry proposals for a scrappage scheme, and access to finance and credit," said SMMT chief executive Paul Everitt.
The scrappage scheme, which has been supported by the AA motorists' group, proposes that motorists should be paid for trading in their old cars and buying new ones.
While it has already been adopted in Germany, the UK government has so far rejected the idea, saying it was unsure whether it would offer value for money.
Instead, the government in January outlined a package of support for the UK car industry that could potentially be worth up to £2.3bn.
The package includes a scheme to unlock £1.3bn of loans from Europe for car manufacturers and major suppliers, and guarantees for up to £1bn of further loans.
Small car boost
The SMMT said sales of new cars in February fell in all sectors except those of the smallest cars, in what it defines as the "mini segment".
It said sales of the smallest cars rose 47.3% in February from a year earlier.
On a model-by-model basis, the Ford Fiesta was the best-selling car in February for the fourth month in a row, selling 3,260 units.
It was followed by the Ford Focus, with sales of 3,241, and the Vauxhall Corsa, up 2,856.