The UK new car market rose 2.5% to 2,404,007 units, last year.
Diesel models took a record 40.2% (967,436 units) while 'supermini' and small family cars also posted growth, up 17,729 and 25,084 units respectively, reflecting their fuel efficiency.
The Society of Motor Manufacturers and Traders (SMMT) said average new car CO2 emissions fell 1.4% year on year to 164.9 g/km.
"Last year, demand for new cars was stronger than many had predicted," said new CEO Paul Everitt. "There is little sign that the US credit crisis or rising fuel prices have affected demand and we foresee only limited changes through 2008. The UK economy currently remains resilient and the new car market is ultra-competitive."
While perennial market leaders Ford (up 1.3% to 348,982 units) and GM's Vauxhall (up 9.8%, 331,321) made some gains, notable improvers included Dodge (up 51%), Alfa Romeo (up 40%), GM-Daewoo Chevrolet (28%), Daihatsu and Mini (25%), and Audi (17%). Chrysler sales were off 21%, Jaguar 19%, and Hyundai, Kia and Subaru in the 16-18% range.
And, despite the manufacturer going under in March 2005, MG still managed to notch up 128 registrations last year.