New car registrations last month were down 38.5% on February last year.
Sales of commercial vehicles fell by 37%.
The Motor Industry Association says the downturn was anticipated and the industry reduced stock levels from the middle of last year.
It says rising prices for new vehicles are due to the declining value of the New Zealand dollar. Further price rises are likely.
However, the falling market has not affected the relative popularity of vehicles: Toyota maintains the top spot ahead of Ford.
