The industry body said vehicle registrations dropped 12.2% year-on-year to 158,192 last month - the second double-digit decline this year.
For the year to date, overall new vehicle registrations are down by 4.6% compared with the first ten months of 2016.
Alex Buttle, of vehicle buying comparison website Motorway.co.uk, said: "Diesel's market share is plummeting and consumers aren't listening to rhetoric about cleaner diesel models, however much the industry drums on about it".
Year to date registrations decrease -4.6%.
"Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK".
Alternatively Fuelled Vehicle (AFV) demand continued to rise, up 36.9 per cent to 8,244 registrations, while petrol models enjoyed a more modest growth of 2.7 per cent.
Diesel cars have been the subject of particular focus in light of recent attention on the UK's air quality, as older diesel vehicles, particularly those that do not meet the latest (Euro VI) vehicle emissions standard, are known to emit high levels of air pollutants such as nitrogen oxides.
The SMMT said falling confidence among buyers continued to impact the market with business and fleet demand down -26.8% and -13% respectively. It's been a few months since the Ford managed to take the number one spot, but the all-new model looks to have put it back in the game.
The SMMT is now predicting full-year sales of cars will fall 4.7 per cent to 2.57m units this year, having revised down its forecast last week.
The Government said earlier this year it would aim to end sales of conventional diesel and petrol cars by 2040, while ministers are said to be drawing up plans to tax diesel cars more heavily in towns and increase duty on the fuel.
Overall, fewer new cars are being registered.
"Whilst many - including ourselves - openly expected this correction in sales, it's more complicated to predict exactly where they will go as we move into 2018".
Demand for diesel has fallen by nearly a third, with diesel auto registrations down by 29.9% during October, compared to the same month in 2016.
General uncertainty is making businesses and consumers reluctant to make buying decisions, according to Andy Hartley, commercial director at Lex Autolease.