Last month's new-car registrations were a record for December, and helped make the year total the third highest ever, but the SMMT is cautious about prospects for 2001.
Garel Rhys, professor of motor industry economics at Cardiff University Business School, predicted the next 12 months could set a new record with 2.4m registrations but the SMMT is not revising its forecast of 2.25m units.
Retail buyers boosted registrations in December to a record figure, with the year ending on 2,221,647 units.
Sales to retail customers reached 43,367, a 42.3% increase over December 1999.
Their return to showrooms will be welcome news to dealers following a difficult year, blamed on uncertainty created by price cuts due to the Competition Commission probe.
Retail buyers regained their enthusiasm in November and December to create a record fourth quarter. But registrations attributed to them were at the same level as 1999, indicating the strength of their boycott earlier in the year.
The overall market in 2000 was up 1.1% over 1999. Total registrations in December were 107,803, an increase of 27.5% over December 1999. Fleet sales were up 18.1% at 53,495 and business sales were 18.2% higher at 7,941.
SMMT chief executive Christopher Macgowan said: “The year-end figures are excellent news and represent a massive vote of confidence for the industry by UK car buyers.”
Professor Rhys said consumers had decided further falls in prices were unlikely and pricing was now no longer an issue. “The market could well go crashing through the record and up to 2.4m,” he said.
The highest total on record was 1989 with 2,300,944 sales; second was 1998 with 2,247,402.
If the SMMT is right, 2001 will become the second best year ever.
Biggest gains in the year were made by small cars. Both mini and supermini rose rapidly and added more than 107,000 units to the market place. Mini sales were up by some 30% and supermini by 15%. The other sector to show strongly was compact MPVs like Vauxhall Zafira and Citroen Picasso. This sector was higher by about 15%.
The biggest winner of the year was Kia, which saw sales up 80% from 6,385 in 1999 to 11,523.
Skoda saw its sales for the year up 34.58% to 29,255 from 21,738. Strong performances also came from Fiat, up 21.79%, Chrysler Jeep (20.06%) and Citroen (16.88%).
MG Rover finished the year strongly with a 31% year-on-year rise for December, although UK registrations for the year were down 5.9% to 103,663. The group said that overseas sales reached 102,000 and “recovery was firmly on course”.
Losers included Proton, down 44.89% from 5,986 to 3,299, and the IM Group, importers of Daihatsu, Isuzu and Subaru. Its overall sales were down 32.84% with each brand showing substantial falls.
Best selling car for the year was Ford Focus, while Vauxhall Astra edged past 1999's best seller, the Ford Fiesta, to take second place.
Sales of British-built cars were up by 0.8% for the year at 629,210, representing a 28.3% market share.