Improving confidence within the fleet and business sectors is helping to soften the decline of new car registrations.
March's total 366,101 unit market was a 7.9% drop from the same month last year, better than the industry expected.
Moreover, exclude 2010's scrappage results and last month ended 5.9% ahead.
The result demonstrates “sustained demand in what is traditionally the biggest month of the year”, said Paul Everitt, Society of Motor Manufacturers and Traders chief executive.
“Despite a dip versus 2010, the market remains on course to meet SMMT’s forecast for the year with motorists buying increasingly fuel-efficient and low emitting vehicles across every segment.”
Registrations in quarter one were down 53,212 units or 8.7%, but at 558,336 units, were over 11,000 units ahead of SMMT expectations.
The market is expected to decline further in Q2, before stabilising and recovering in the second half of the year to show a net decline of 5.0% to 1.93 million units.
SMMT will review its forecasts this month.