The number of new cars sold in the UK last year tumbled to its lowest level since 1992 but the sector says supply shortages, which have held sales back, are “beginning to ease”.
Preliminary data for 2022 released by the Society of Motor Manufacturers and Traders (SMMT) showed around 1.61 million new cars were registered.
The figure is 2% down on the previous 12 months and 25% down on pre-pandemic levels.
However, sales improved as the year progressed.
The market recorded its fifth consecutive month of growth in December.
The industry body said the annual decline was due to manufacturers being unable to meet demand for new cars due to global supply chain issues, such as semiconductor shortages, which have been exacerbated by COVID restrictions in China.
The squeeze has meant that factories worldwide have been unable to produce the volume of vehicles they would wish.
Carmakers have strong order books, despite the cost of living crisis putting huge pressure on household budgets, with some waiting lists extending beyond 12 months.
More details are set to be revealed after 9am on Thursday but the early data showed that demand was shifting away from traditionally-powered petrol and diesel models.
As the clock ticks down to the 2030 ban on the sale of cars with internal combustion engines, battery electric took a market share of around 17% in 2022.
That meant it surpassed diesel for the first time to become the second most popular powertrain after petrol.
Some 23% of all