The Society of the Irish Motor Industry has said that car sales last year were down 12% on the previous year.
A total of 79,498 new cars were sold in 2012, new SIMI figures show. They also reveal that 23% of cars sold last year were petrol, while 74% were diesel.
Volkswagen was the best-selling car brand in Ireland in 2012, ahead of Toyota in second place and Ford in third place.
A total of 10,073 new Volkswagen cars were sold last year to give the company a 12.67% market share.
This came ahead of Toyota's 9,998 (12.58% market share) and Ford with 8,592 (10.81% market share).
The Ford Focus was the best selling car, followed by the Volkswagen Golf and the Nissan Qashqai.
The SIMI figures also reveal that silver was the most popular car colour last year.
From today on, all new cars bought in Ireland will have a new number plate. Instead of 13, the new number plates will begin with 131.
"While it is too early to tell how new car sales are doing, there certainly has been a lot of interest from the public in the new number plate.
"Only time will tell what impact the new plate might have on sales but we expect demand to increase when we begin to see new cars on the road,'' said SIMI's director general Alan Nolan.