Sales of diesel cars in the UK fell by nearly a third in October compared with last year, prompting the motor industry to call for help in the Budget.
The Society of Motor Manufacturers and Traders (SMMT) wants to see government-backed incentives to encourage people to buy low emission diesel vehicles.
Overall vehicle sales fell by more than 12%, marking the seventh consecutive month of declines.
The SMMT blamed a drop in business and consumer confidence for the fall.
So far this year, new vehicle registrations are down by 4.6%.
"Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel," said Mike Hawes, SMMT chief executive.
"We urge the government to use the forthcoming Autumn Budget to restore stability to the market, encouraging the purchase of the latest low emission vehicles as fleet renewal is the fastest and most effective way of addressing air quality concerns."
In its latest report, the SMMT said there were 158,192 new cars sold last month, a 12.2% decline.
All sectors suffered declines, with business sales 26.8% lower, fleet sales down by 13% and private buyer demand falling by 10.1%.
However, demand for Alternatively Fuelled Vehicles (AFV), including electric and hybrid, rose again, increasing by 36.9% to 8,244 registrations.
Sales of petrol vehicles grew by 2.7%.
"However, these gains were unable to offset heavy losses in the diesel segment, as continuing consumer concerns resulted in its biggest hit yet, with demand down 29.9%," the SMMT said.
Sales of diesel vehicles fell by 21.7% in September.
The SMMT said overall vehicle sales for the year as a whole were set to come in at 2.565 million units, 4.7% down on 2016.
The best selling model in October, and the year so far, was the Ford Fiesta.
The EY Item Club described the sales figures as "further disappointing and worrying news for the car sector".
"Sales of diesel cars have been hit particularly hard by pollution concerns and air quality plans but the weakness in car sales runs significantly deeper than this,"
Consumers are "uncertain" and "reluctant to make major purchases, it said, and "car scrappage and trade-in schemes as well as discounting appear to have had a limited impact in getting pressurised consumers to splash out on a new car", it added.