New figures from the Society of the Irish Motor Industry show that both new and second-hand car registrations fell in January.
The SIMI figures show that new cars registrations in January slowed down by 3.5% to 31,251 from 32,370 the same time last year.
Used car imports saw a 26.4% decline in January to 6,623, down from 9,003 last year, mainly due to the introduction of a new tax based on a car's nitrogen oxide (NOx) emissions.
This new tax was introduced on 1 January and replaced the 1% diesel surcharge.
Today's SIMI figures also show that registrations of light commercial vehicles were up by 2.1%, while heavy goods vehicle registrations jumped by 8.8%.
Diesel continued to remain the most popular engine type, accounting for 42.1% of new car registrations, followed by petrol (39.6%), hybrid (13.6%), electric (2.9%) and plug-in hybrid (1.8%).
SIMI also noted that new electric car registrations rose with 898 registered in January 2020, compared to 799 in January last year.
According to SIMI, the ten top selling car brands last month were Toyota, Hyundai, Volkswagen, Skoda, Ford, Renault, Nissan, Kia, Peugeot and Seat.
Meanwhile, the five top car models in January were the Toyota Corolla, the Hyundai Tucson, the Ford Focus, the Hyundai Kona and the Renault Clio.
Brian Cooke, SIMI Director General, said that January is the most important selling month for new cars.
"In this regard, it is very disappointing to see a reduction in new car sales compared to January last year, the fourth consecutive year in which there has been a fall," Mr Cooke said.
But on a more positive note, Mr Cooke noted a reduction of nearly 6% in the average CO2 emissions from new cars registered in January, which he said underlined the industry's commitment to reducing emissions from new cars.
He said the motor industry is fully committed to further significant reductions in emissions in the years ahead.
"New cars ultimately displace the oldest most environmentally damaging cars in the national fleet and in order for Ireland to benefit fully from these technology improvements the new car market needs to be much stronger than it currently is and Government policy should support this," the SIMI Director General added.
When it comes to buying cars, licensing and registration are different processes.
A vehicle is licensed when a valid motor tax disc is issued for the first time whereas registration occurs when a vehicle gets its licence plate (registration number) for the first time.