Fleet sales continued to dominate the new car market in January, accounting for 58.9% of the market with 75,893 units out of 128,853 new cars registered.

January typically accounts for around 7% of annual registrations, ahead of the key March market, which typically represents 18% of the annual market and approximately 65% of volumes registered in quarter one.

"The January new car market held firm with 128,853 registrations, marginally up on January 2011, a welcome sign of stability in uncertain economic times," said Paul Everitt, SMMT chief executive.

"2012 is set to be an exciting year with record numbers of new models coming to market filled with innovative technology that will save the motorist fuel, enhance comfort and further increase levels of safety and security.

"However, to maintain market stability, government must act decisively and deliver much needed confidence to businesses and consumers."

Demand for diesel cars continues to rise and its market share moved from 50.5% a year ago to 53.7%, as motorists look to ensure increased fuel efficiency.

Meanwhile, registrations of alternatively fuelled vehicles rose by 17.7% in the month and accounted for 1.6% of the market, mirroring the record levels confirmed in November and December 2011, on the back of new products entering the market.

“It is positive that new car sales were up in January, with growth recorded in both the private and fleet markets,” said Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers across the UK, commenting on the SMMT’s new car registration figures.

New car sales figures, released today, show month on month sales were up 0.03% compared to January last year.

Robinson continued: “The growth in sales last month shows some sign that the market is finally beginning to recover."

However, Robinson like Everitt said the Government still needed to look at schemes that could improve consumer confidence and boost spending to ensure the growth continues.

"This is a message we relayed at our recent MP and ministerial meetings,” she said.

The Ford Fiesta was the best selling model in January 2012. Four of the top sellers were Superminis and the segment showed the largest rise in volumes during January. Growth in demand for Luxury, Dual Purpose, Executive and Sports segments is also evident.

SMMT revised down its full year forecast of the new car market in 2012 to 1.92 million units, a 1.1% drop on the 1.94 million unit outturn in 2011.

It says the economic outlook remains weak and continues to make the new car market challenging, but new and more efficient products should provide support to volumes as we move forward through 2012.

The market is expected to grow to 1.98 million units in 2013.

Richard Lowe, head of Retail and Wholesale, Barclays Corporate, concluded: “Last month’s mild weather helped to get buyers onto forecourts, but the market is still tough.

"It remains to be seen whether January’s uplift can gather momentum in the current climate, but with a number of new model launches due out this year, there is hope that car sales will be buoyed.”