Overall sales were up 4.12% at 2,025,450 - helped by a 5.7% increase in sales of all business cars and a 4.68% rise in fleet sales to 955,371 from the previous record high of 912,629 in 1995. Fleet sales now account for 47.2% of new car sales in the UK up from 46.9% in 1995. Retail sales increased by 2.3% during a patchy year which saw dramatic peaks and troughs in demand, but a very strong end to the year. Commercial vehicle sales were also up by 2.8% to 257,000 units.

Society of Motor Manufacturers and Traders chief executive Ernie Thompson said: 'We predict that growth will continue in 1997 - provided economic conditions remain relatively stable - to a market of between 2.05 and 2.07 million.' Looking further ahead Thompson predicted a total market of 2.2 million units by the turn of the century.