Sales of diesel cars have dipped despite the UK new car market achieving a 12-year high in January, according to figures published by The Society of Motor Manufacturers and Traders (SMMT).

It reported that 174,564 vehicles left showrooms last month – a 2.9% year-on-year uplift and the highest level since 2005.

But while petrol cars were up 8.9% at 88,507, diesel sales were down 4.3% at 78,778. In the same month last year more diesel cars were registered than petrol at 82,314 versus 81,292

The alternatively fuelled vehicle segment grew 19.9% to take a record 4.2% market share – the first time 4% has been surpassed – achievingw 6,072 registrations.

SMMT chief executive Mike Hawes said: “2017 got off to a good start in the new car market, buoyed by a great range of new models which are safer and cleaner than ever before.

“It’s encouraging to see alternatively fuelled vehicles benefiting from this positive growth, reaching a record market share. After record growth in 2016, some cooling is anticipated over the coming months, but provided interest rates remain low and the economy stable, the market is in a good position to withstand its short-term challenges.”

“The performance reflects the strength and importance of the retail motor sector adding to the growth of the UK economy”, said Sue Robinson, director of the National Franchised Dealers Association (NFDA).

She added: “It is extremely encouraging to see that following last year’s slowdown, private demand came back strong with a growth of 5.0% in January.

“The decision of the Bank of England to raise the growth forecast for this year from 1.4% to 2.0% is a positive sign as, in line with January’s new car market figures, the UK economy has remained stable in the aftermath of Brexit.

“A number of factors including the new and more expensive VED tax rates coming into effect in April, low interest rates and attractive finance packages will continue to attract new buyers in the upcoming months.”