New car registrations in January in the UK climbed 2.9% compared with the same month in 2015, and were the highest in January for 11 years at 169,678 units.

Private and business buyers drove this growth with demand for new cars up by 8.2% to 73,061 and 5.0% to 6,716 units respectively, while the fleet sector declined slightly by 1.1% to 89,901.

Alternative-fuel vehicles also grew in popularity – and market share – with registrations up by 32.1% on January 2015, to account for a record 3.6% of registrations. Petrol hybrids showed the largest growth, up 44.1% to 3,783 cars, while plug-in hybrid demand grew 32.3% to 1,592 vehicles and pure electric cars had an uplift of 14.1% to 584 units. Demand for diesel, which just retained the majority market share, remained stable, up 0.6%, while petrol registrations grew 3.7%.

Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes said: “January’s solid performance puts the new car sector in a good position to start the year. Providing consumer confidence remains strong, we expect a more stable 12 months ahead, broadly similar to 2015 which was, of course, a record year.”

“It is extremely positive to see that the car market in January has continued its upward trend – making it the best month for new car registrations since 2005,” said Sue Robinson, director of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers across the UK.

She added: “Consumer confidence continued to grow as the economy becomes more robust, and retail customers feel secure enough to commit to buying cars. This is helped by the competitive offers made available by the manufacturer and a more disposable income due to higher levels of employment.”