The figure of 90,249 cars was the industry's worst start to a year since 1970 as showrooms across the country remained shut due to the coronavirus pandemic.
SMMT chief executive Mike Hawes said: "Following a £20.4 billion loss of revenue last year, the auto industry faces a difficult start to 2021.
"The necessary lockdown will challenge society, the economy and our industry's ability to move quickly towards our ambitious environmental goals.
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"Lifting the shutters will secure jobs, stimulate the essential demand that supports our manufacturing, and will enable us to forge ahead on the road to zero.
"Every day that showrooms can safely open will matter, especially with the critical month of March looming."
Luxury car maker Jaguar Land Rover, which has its engine manufacturing centre at the i54, near Wolverhampton, also saw a drop in sales.
It sold 60.6 per cent fewer Jaguars at 914 from a year ago. Land Rover sales dropped 35.3 per cent to 3,628.
Longbridge-based MG, which had bucked he trend of falling car sales last year, also saw a drop on the year. Its figures were down 25.5 per cent to 1,374.
Ford topped the sales chart with 8,706, followed by Vauxhall wioth Wolkswagen with 7,569 and BMW at 7,002.
The all-new Vauxhall Corsa was the UK’s best-selling new car in January with 3,078 sold.
James Fairclough, chief executive of AA Cars, said: “Car dealerships began the new year closed due to the lockdown and unfortunately without any idea of when they may re-open, slowing the number of new car sales to a trickle.
“Nevertheless this lockdown is likely to be different to the shutdown last spring. Many dealers have adapted their proposition, and increasing numbers are now offering home delivery and click and collect options.
“Digitalising elements of the sales process has no doubt been challenging for many, but the industry’s effort and agility will pay off in the long-run – as we expect some drivers will prefer to buy in this way in the future.
“In the short-term, the focus is on two crucial questions – when will dealerships be allowed to reopen, and what will be the impact of the new registration plates introduced at the start of March?"
The new car market had 59,030 fewer registrations compared to January last year.
Demand remained depressed for both private buyers (down 38.5 per cent) and large fleets (a fall of 39.7 per cent). Declines were also recorded in both petrol and diesel cars registrations, which fell by 62.1 per cent and 50.6 pe cent respectively.
With lockdown restrictions in place until March – the most important month of the year for the sector, accounting for one in five new car registrations on average – the industry will face a challenging year as showroom closures depress consumer demand, which has a knock-on effect on manufacturing output.
The effect of the current lockdown can be seen in SMMT’s latest market outlook. Having expected more than two million new cars to be registered in 2021, this forecast has now been downgraded to below 1.9m given the more severe negative impact on first quarter performance and March in particular.