The average amount of carbon dioxide emitted from new cars and light commercials sold in New Zealand last year fell almost 4g per kilometre, from 201.6g/km in 2010 to 197.1g/km, said the Motor Industry Association (MIA).
It was the first time emissions have dropped below 200g/km. In 2008, the new vehicle fleet averaged 210.6g/km.
"The figures show that the industry is committed to improving fuel efficiency and reducing CO2 emissions," said MIA chief Perry Kerr.
"The result is a combination of improvements in vehicle technology and a change in consumer buying preferences toward lower-emission vehicles."
The snowballing rate at which New Zealand motorists are adopting fuel-efficient new cars is likely to sideline any government attempts to introduce mandatory vehicle CO2 emissions standards.
The previous Government wanted a fleet CO2 target of 170g/km by 2015, but the current administration is pretty much leaving it to the automotive industry.
The MIA has been against mandatory CO2 emissions standards, saying the motor industry is already achieving significant annual reductions in CO2 output from its new-vehicle fleet.
"We accepted the need for a target but disagreed with the previous Government's need for it to be mandated," said Kerr.
"We wanted it to be voluntary, knowing that the automotive industry is committed to building cleaner vehicles."
But several organisations continue to ask the Government to set an emissions target, to force the motor industry to increase the pace.
The Australasian Fleet Management Association, which looks after more than 800,000 vehicles across Australia and New Zealand, has called on governments to fall into line with more stringent European CO2 standards that will require all passenger cars to average 130g/km and light commercials 170g/km by 2015.
The MIA will next week release last year's CO2 figures for the two segments in New Zealand. In Australia last year, passenger car CO2 emissions averaged 183.9g/km, down 4.5 per cent on the previous year's 192.5g/km, and light commercials 245g/km, down from 250g/km.
Two of the most significant factors in New Zealand's sub-200g/km figure are a swing to smaller cars and the popularity of diesel engines in all cars, SUVs and light trucks.
One small car that will help to further cut the CO2 figure is the new Toyota Yaris Hybrid, expected to be unveiled at the Geneva Motor Show next month and go on sale in Europe in June.
Toyota says it is its most fuel-efficient hybrid to date. The Yaris Hybrid will deliver a claimed 3.5 litres/100km (80mpg), bettering both the Auris and Prius hybrids, which return best figures of 3.8 litres/100km and 3.9 litres/100km. The Yaris Hybrid will use a new 1.5-litre petrol engine that, combined with the electric motor, produces 70kW.
The engine is 10 per cent smaller and 16.5kg lighter than the system used in the Auris and Prius. The electric driveline components have also been reduced in size and weight.
The battery pack is located under the rear seat, so boot space is the same as in the standard Yaris.
Toyota NZ won't talk about the hybrid Yaris. Said a spokesperson: "At this stage, our strategy is to broaden the Prius line-up by offering a compact hybrid [the Prius C] to give customers more choice in this segment."