Booming sales of small cars boosted the Australian new car market to near-record levels in July.

According to VFACTS figures released by the Federal Chamber of Automotive Industries (FCAI), 78,299 cars, trucks and buses were sold Down Under last month, up 1.6% on July 2004 and only 1,292 less than the July record set in 2003.

"The July result has alleviated any industry concerns that the all-time monthly record set in June was the result of a pull-through in demand caused by end-of-financial-year sales," said FCAI chief executive Peter Sturrock.

Sturrock said demand for vehicles in the year to July was running at 4.9% - slightly down on last year's annual gain for the same period of 5.5%.

"The slight softening is more a result of the massive June sales when 101,907 vehicles were bought in just 25 days," Sturrock said.

"The result confirms the underlying strength of the new car market which is clearly headed for another substantial new annual sales record."

A record 955,229 vehicles were sold in 2004 and the FCAI has forecast 980,000 this year.

Demand for cars in the 'small' segment was up 26.0% month-on-month, while the Medium car segment was up 8.1%.

At the same time, sales of SUVs were down 5% and large cars down 13.3% on July 2004.

"The results clearly point to a growing consumer trend towards more fuel-efficient vehicles, although it should be pointed out that, year-to-date, sales of SUVs are actually up 7.7%," said Sturrock.

According to the FCAI, motor vehicle retailers are preparing for a strong five-month push.

"Most importers have now forward-ordered to the end of the year in anticipation of record sales so their vehicles are in the pipeline," added Sturrock. "The bases are loaded for a major sales thrust."

Toyota was the top-selling brand in July with 16,415 or a 21.0% share of the market, ahead of Holden with 14,050 (17.9%), Ford with 9,338 (11.9%) and Mazda with 5,325 (6.8%).

Honda surged to fifth place in July with 4,593 (5.9%), just 19 vehicles ahead of Mitsubishi with 4,574 (5.8%).

On a year-to-date basis, Toyota continues to lead the market with 114,391 sales, 10,113 vehicles ahead of Holden, with Ford third (76,082).

Mazda is in fourth place, with sales of 39,263 for the year to date, closely followed by Mitsubishi with 38,524.