Australian new motor vehicle sales were flat last month, despite higher interest rates and fuel prices.

Official VFACTS figures released by the Federal Chamber of Automotive Industries (FCAI) showed that 88,640 cars, trucks and buses were sold in May - an increase of 43 vehicles on the same month last year.

"This is a good result for the automotive industry, although there is evidence that interest rate rises and other factors have slowed the rate of growth in recent months," FCAI chief executive Andrew McKellar said.

Year-to-date, the car market is now up 4% on the same period in 2007, which was a record year.

The May figures reveal a 'two-phase' car market, with passenger cars down slightly (-2.5%) while SUV and light commercial sales continue to boom.

Sales in the medium SUV segment were up 16.8% on May 2007 and the large SUV segment was up 12%, despite the impact of higher fuel costs.

The light commercial vehicle market also continued to be buoyant - with pickup truck ('ute') sales particularly strong.

The pick-up/cab-chassis 4x4 segment rose 5.7% over May last year, while the van segment rose 22.5%.

McKellar said an increasing number of passenger vehicles and SUVs were being bought with clean-diesel engines.

"Several new common-rail injection clean diesels have entered the market in the past few months, and we can see that Australian drivers are keen to give the new technology a try," he added.

Vehicle buyers seeking improved fuel efficiency do not necessarily have to choose a smaller vehicle.

"The traditional image of diesel vehicles has changed," he said. "Diesel vehicles can provide significant benefits in terms of fuel efficiency and reduced carbon emissions but have good power and performance."

McKellar added higher fuel prices should not scare consumers away from traditional petrol engines either, because new technology has made these more efficient.

"Our analysis shows that higher fuel costs are prompting people to shop around to find a new car that both suits their needs and also has better fuel economy than the one they are currently driving," he said.

Toyota remained the top-selling brand in May with 23.4% of the market, followed by General Motors' Holden with 12.5% and Ford with 10.9%.

So far this year Toyota leads the sales race with 101,816 vehicles sold, followed by Holden with 55,155 and Ford with 44,183.