New car registrations increased year-on-year by 9.3% in July to 143,884 units with the Society of Motor Manufacturers and Traders (SMMT) citing fuel efficient models and competitive deals as the reason for the increase.
Private registrations were up 26.4% despite what the SMMT calls "an unsettled economic backdrop, with disappointing GDP figures and constrained consumer and business spending".
There is still uncertainty within the automotive retail industry over what percentage of private registrations is true retail growth and what is pre-registration activity.
David Raistrick, UK manufacturing leader at Deloitte, said: “The continuing growth in new car sales in the UK, compared to increasing pressure due to tough economic conditions, which is resulting in reducing sales elsewhere, is starting to raise questions in global markets.
"This has led to recent suggestions from both retailers and industry insiders that an increase in pre-registration of new cars is perhaps distorting the level of growth being reported in the UK market, particularly in respect of private sales."
Deloitte said "official data" shows recorded pre-registrations are up 76% on the first six months of 2011.
While the numbers of vehicles are not material to the overall new registrations being reported, it does raise the question as to what is driving the increase.
RMI looking into "transparent view of the market"
Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), said: “In light of speculation about the new car market the NFDA, representing franchised car, commercial vehicles and motorcycle dealers, are carrying out an review of the registration figures to ascertain a more transparent view of the market.
“The Olympic games may have caused distraction for consumers with the press reporting a drop in retail sales during the first week of August. Therefore in order for the market to remain stable the Government should offer support by reviewing schemes that boost spending.”
Paul Everitt, SMMT chief executive, said: “SMMT’s full year forecast is for 1.97 million cars to be registered during 2012 suggesting a slight slowing of demand in the second half of the year.
"International economic stability remains a concern for vehicle manufacturers and the UK market, but intense competition and new fuel efficient products are creating great opportunities for motorists."
The SMMT has revised up its full year forecast for 2012 to 1.97 million units, compared with 1.94 million in 2011.
On a 12-month rolling basis, registrations have improved by some 40,000 units or 2% since the start of the year to 1.98 million units, but there is still some headway to recover to the 2.4 million, pre-recession, market of 2007.
All fuel types saw an increase in volumes in July, most notably the market for alternatively-fuelled cars, up 45.9% as new products entered the marketplace.
Demand for petrol cars was also boosted by strong growth in the mini segment, again reflective of new model activity.
The mini segment grew 93.4% in July, and the dual purpose by 42.5%, with the supermini and MPV markets also showing double-digit growth in the month.
The Ford Fiesta was the best-selling model in July and over the first seven months of 2012.