Latest figures show that light commercial vehicle sales reached 49,013 units, up 15.1% on the same month last year.
Year-to-date sales are 84,010 units, an increase of 9.4%.
SMMT chief executive Christopher Macgowan said: 'March is a key month in the sales calendar and this year it breaks all records at 55,678. The previous record of 55,232 was set in August 1989.
'The strong economy and positive economic outlook are encouraging and the UK LCV market reflects that business confidence. A good result for the industry is that this has nudged the underlying annual registration volume beyond the historic record levels set in 1989.'
The SMMT said that within the LCV market categories, only pick-ups and 4x4 utilities saw lower registration volumes compared to the same month last year.
Macgowan added: 'The drop for 4x4 utilities was modest compared to the 21.3% year-on-year fall for car-type pick-ups. For car-type pick-ups, rapid growth was always going to be difficult to sustain, especially as March 2002 and 2003 saw year-on-year increases of 117% and 52%.
'It may be that the market has stabilised at about 13,000 units. The 4x4 sector may also level out in 2004, albeit after a significant decline in 2003.'
The SMMT figures show that van registrations up to 1.8 tonnes were up by 5.6% in March and 1% over the year to March. Medium and heavy vans, 1.8-3.5 tonnes, were up by 20% year-on-year.
The crucible of growth at 26.8% was in the heavy van segment, 2.6-3.5 tonnes. Here, registrations jumped 6,187 units to take more than 90% of the extra volume for all LCVs for the month, compared to the volume at March 2003.'
Vauxhall experienced the biggest growth in the market during 2003 but for March 2004 and for the first quarter of the year, Ford has made the running.
Vauxhall said sales of its LCVs last month, at 7,929 units, were up by 23.3% over the same month last year and that they broke a single-month sales record set 15 years ago.
The manufacturer said over the first quarter of 2004 its commercial vehicle sales had increased by almost 4%.
'This all-time record shows we are producing the right sort of vans for a growing customer base,' said Vauxhall commercial vehicles brand manager Jonathan Leicester. 'We had our best ever CV Show last month with huge interest in the range. We have some exciting new Vivaro models on the stocks, so we confidently expect Vivaro sales to grow further.'