New car sales were 4.4% lower last year when compared to 2017, according to figures from representative body SIMI, marking the second consecutive year of decline for the industry.
There were 125,557 new cars registered during 2018, 5,775 fewer than in the previous year. Compared to 2016, car registrations are 21,093 (14.4%) lower.
According to SIMI, there was a 7.8% rise in the number of imported used cars during 2018, pushing the figure to a record high of 100,755.
Of the new cars sold last year 54.4% were diesel, though that fuel type's market share has fallen by more than ten percentage points in the past year alone.
Petrol-powered vehicles made up 38.5% of registrations, while petrol-electric hybrids continued to grow in popularity - rising to a 5.5% share of sales.
At the same time electric car sales almost doubled to 1,233 in 2018 - however they still made up less than 1% of registrations in the year.
Meanwhile the SIMI figures show that Volkswagen remained the most popular car brand in the year, taking almost 11% of all sales. Toyota remained the second most popular brand with 9.6% of sales, while Hyundai overtook Ford in third position.
Hyundai's Tucson was still the most popular new model in Ireland, accounting for 3.2% of registrations. Nissan's Qashqai became the second most popular model, having been in third place in 2017, while the Ford Focus moved from fifth to third.