The Federal Chamber of Automotive Industries said the fall in emissions was driven by improvements in engine technology.
Data shows the average emission level from the 907,851 new vehicles sold in Australia last year was 218.5 grams of carbon dioxide per kilometre driven, compared to 222.4 grams per kilometre in 2008.
"Motorists are being very conscience of achieving reduced emissions," the chamber's chief executive, Andrew McKellar, told ABC Radio.
They were moving towards more fuel-efficient vehicles and also vehicles with a lower carbon emission.
"The other thing is that the industry is bringing a range of new technologies, better engines, better transmissions into the market."
Vehicles contribute about 10 per cent of Australia's greenhouse gas emissions and levels in Europe are much lower.
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