The plate-change month of March saw new car registrations rise by 26.6% to 397,383 units and was yet again boosted by the scrappage scheme which accounted for 12.2% of the volume.
Private buyers led the growth, but fleet and business demand also improved which is good news for dealers looking to build on the momentum to get them through the summer.
Paul Everitt, SMMT chief executive, said: “The UK motor industry has enjoyed a better than anticipated first quarter of 2010.
“A strong March performance was underpinned by the scrappage incentive and improving demand in the fleet sector. The coming months will remain challenging and headline registration numbers are expected to dip, but underlying demand will continue to improve slowly.”