Total numbers are up on January's results - the worst January result since 2009 - for a total number of vehicles sold in February of 79,940.
This contrasts with February 2019's figures of 87,102, and represents the 23rd consecutive month of dwindling car sales compared to the prior year.
According to FCAI chief Tony Weber, seven consecutive quarters of negative growth in car sales means Australia is in an 'automotive recession'.
"In economic terms, a recession is declared after two quarters of negative growth," Mr Weber said.
“There is no doubt that this is an extraordinarily difficult time for the automotive industry – a situation sadly underlined by the recent announcement of Holden’s withdrawal from the Australian market."
The Northern Territory experienced the biggest drop in sales, down 30.8%, followed by New South Wales by 11.3%.
The only state or territory to experience growth was the Australian Capital Territory with a 52.8% increase in cars sold.
The latest fall in car sales comes after dealership confidence fell 50% in less than two years.
FCAI attributed difficult market conditions to environmental factors such as coronavirus, bushfires and drought, as well as wavering consumer confidence.
However, car share service GoGet reported a 24% growth in membership in the past year, to now amass more than 150,000 members.
GoGet's Locations and Transportation Planner Josh Brydges attributes that to customers balking at the expensive cost of car ownership.
"Beyond the sticker price of new vehicles, not owning a car saves the average person up to $6,000 per year through not having to pay for petrol, insurance, registration and servicing," he said.
"In our latest membership survey, 48% of respondents said they had deferred a car purchase since joining GoGet."
February 2020 was the second month FCAI used the new VFACTS car sales reporting system.
Most popular car makes and models
It was another win for Toyota in February, with it being the top selling car brand and laying claim to the two top-selling models - the Hilux and RAV4.
Toyota also had five of the top ten selling models.
The top ten makes in February according to VFACTS were:
| Make | Volume Feb 2020 | Market Share |
| Toyota | 17,679 | 22.1% |
| Mazda | 7,230 | 9.0% |
| Hyundai | 5,945 | 7.4% |
| Mitsubishi | 5,513 | 6.9% |
| Kia | 5,120 | 6.4% |
| Ford | 4,856 | 6.1% |
| Nissan | 3,804 | 4.8% |
| Volkswagen | 3,633 | 4.5% |
| Honda | 3,522 | 4.4% |
| Subaru | 2,603 | 3.3% |
It was another death knell for passenger vehicles, down 16.6% year-on-year.
The sports utility market was up again, however, by 5.4%.
The top-selling models in February according to VFACTS were:
| Make and Model | Volume Feb 2020 |
| Toyota Hilux | 3,421 |
| Toyota RAV4 | 3,375 |
| Ford Ranger | 3,202 |
| Toyota Corolla | 2,520 |
| Hyundai i30 | 2,152 |
| Mazda CX-5 | 1,969 |
| Kia Cerato | 1,873 |
| Toyota Landcruiser | 1,839 |
| Mitsubishi Triton | 1,673 |
| Toyota Camry | 1,445 |
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