UK new car registrations rose 12.1% to 151,252 units in October, bucking current demand trends in Europe, according to the latest figures from the SMMT, which has revised its forecast for the full year to more than two million units, from 1.94 million in 2011.

The new car market has increased five per cent year-to-date, growing every month but one, to achieve a total of 1,771,861 units – an increase of 83,823 units on a year ago.

Petrol, diesel and alternatively-fuelled vehicle markets posted strong growth in the month and over the year to date, with most vehicle segments growing as well, particularly in the small car and dual-purpose segments, according to Paul Everitt, SMMT chief executive.

"Despite uncertainty in the European economy, the UK new car market continues to grow, with registrations rising more than 12% in October to 151,252 units," he said. "It is encouraging to see the alternatively-fuelled vehicle market performing strongly, up 13% so far this year. Although the alternatively-fuelled vehicle sector represents only a small share of the overall market, it is vital that government sustains its consumer incentive programme and maximises the benefits available through the vehicle taxation system."

Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers across the UK, said retail car sales continued to drive the market in October while fleet sales remain flat.

“Retail customers are now committing to buying cars – often helped by the competitive offers made available by the manufacturer," she said. "In particular, Personal Contract Purchase plans are helping to boost sales as they offer a low-cost finance option to many consumers.

“Smaller cars and AFVs continue to sell well indicating that consumers are now looking for a more economically and environmentally friendly vehicle that offers better fuel economy and cheaper maintenance.”