New car sales were up 5.3% in 2012, compared with the previous year, reaching a total of 2,044,609, according to new car registration figures released by the Society of Motor Manufacturers and Traders (SMMT).

Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), said: “Retail demand drove the UK car market in 2012 while fleet sales were flat.”

Retail registrations in December 2012 increased by 12.5% while fleet registrations fell by 0.3% and small business users fell by 9.5%. Alternative Fuel Vehicles (AFVs) saw a decline of 11.2% in December, and Robinson said this indicated that private buyers are still not convinced of the benefits of these vehicles.

She continued “The overall market for 2012 showed encouraging progress. It indicated that competitive offers by manufacturers persuade retail buyers into the showrooms. Strong finance offers are also winning over consumers, particularly in the form of personal contract purchase plans.

“Looking into 2013 consumers will still need strong encouragement to commit to big ticket purchases such as cars. Consumer confidence is still fragile and competitive pricing and strong incentives will be important in convincing customers to buy a new car.”