End-of-year volumes reached 2,404,007 – exceeding market expectations - as private demand held firm and the sale of diesel cars rocketed.

According to the latest SMMT figures, the private sector accounted for 43.5 per cent of the 2007 new car market with sales of 1.045 million units.

Fleet and business sales also posted growth, taking 49.7 per cent and 6.8 per cent market shares respectively.

It was the continued success story of diesel cars, however, that helped the market remain buoyant.

Diesel penetration hit a record yearly high to take a 40.2 per cent share, notching up 967,436 sales.

The Ford Focus was the year's bestseller and has now been the nation's most popular model since 1999.

The Vauxhall Astra was the second bestselling model, followed by the Ford Fiesta, Vauxhall's Corsa supermini and the Volkswagen Golf.

Ford was also the year's bestselling carmaker but Audi, Honda, Mini and Vauxhall reported the most improved sales growth.

All car sectors bar the mini, upper-medium and luxury saloon segments, posted improved volumes.

The MPV sector reported the best growth up 16.5 per cent, the supermini and lower- medium segments also performed well.

“Last year, demand for new cars was stronger than many had predicted,” said Paul Everitt, SMMT chief executive.

“There is little sign that the US credit crisis or rising fuel prices have affected demand and we foresee only limited changes through 2008.”