Car manufacturers have cut average new car CO2 emissions by their biggest ever margin, reducing emissions by 3.8pc over the first nine months of 2008.
The average new car now emits just 158.6g/km, down from 164.9g/km at the end of 2007 and 16.4pc down on the 189.8g/km base in 1997.
The Society of Motor Manufacturers and Traders' ninth annual sustainability report shows vehicle manufacturers continue to make significant reductions in the environmental impact of its products, throughout the whole life cycle of the vehicle.
"Despite the current difficulties there should be no doubt about the industry's willingness and desire to keep delivering products that are cleaner, safer and more fuel efficient," said Paul Everitt, SMMT chief executive.
"My plea to government is that urgent action is required to support the manufacturing sector during the testing times that lay ahead. SMMT and colleagues across the industry are ready to help and support those efforts."
The report shows that the energy needed to produce each vehicle is down 12pc, water use is down 9pc and waste to landfill is down 25pc, compared to 2006 performance. CO2 emissions per vehicle produced have fallen 14pc in the last year, and by 45pc since 1999 and almost 10,000 tonnes of waste have been prevented from entering landfill sites.
However, economic uncertainty, falling new car registrations and car taxation changes mean that industry faces a significant challenge if it is to continue this level of improvement in the future.
An ageing parc threatens the progress made in many areas because, on average, new vehicles emit less CO2, produce fewer air pollutants, and are quieter and safer than older models.
Everitt added, "The automotive industry is a UK success generating 840,000 jobs across the sector. We are home to global brands providing high quality and high value employment across the life of vehicles and powertrain.
"It is very appropriate that today we do address the sustainability of the automotive industry, and perhaps remind ourselves that economic and social impacts are as important as environmental considerations."
Concerns raised by the report relate to employment and highlight how the closure of vehicle manufacturing plants in the UK affected the industry. The combined number of employees fell 13.2pc due to the closure of Peugeot's Ryton plant in 2007 and this highlights the importance of government action now, to support the 851,000 jobs dependent on the automotive sector in the UK and protect the £51 billion contribution it makes to the UK economy.
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