May new car registrations in the UK dipped 2.8% to 194,480 units but sales for the first five months of 2004 were up 2.7% to 1,137,490.

The Society of Motor Manufacturers and Traders (SMMT) said that the market for convertibles continues to soar, rising 32.1% to 50,203 cars from January to May 2004, while diesel models now account for almost 31% of all new cars sold in the UK (up from 26.2% a year ago).

January to May diesel registrations increased 61,399 units to 351,259 units.

"We forecast that 2.6 million new cars will leave showrooms by the end of this year," said SMMT chief executive Christopher Macgowan.

If that figure is achieved, 2004 would be the fourth consecutive record year for new car sales in the UK.

UK-built cars accounted for only 18.2% (35,446 units) of total May registrations; most of the remaining 159,034 were imported from continental Europe.

The SMMT said that consumer fears of an overly aggressive rise in interest rates and a possible negative effect on consumer confidence of sustained, high oil prices cause it concern for achieving its target forecast.

The Ford Focus was again the UK's best selling car line in May. Renault's Mégane range (recently expanded with additional Scenic minivan models) climbed to third, and the Vauxhall Zafira minivan  - heavily promoted in TV ads during May - made the top 10 for the first time since June 2003.

The UK market for MPVs (minivans) remained strong with registrations up 17.6% in May. Sports cars sales for the year to date were up 30.2% to 30,432.

The SMMT said used car transactions have also shown a sharp rise in recent years. Second hand sales reached a record 7,527,176 units in 2003 and hit the two million mark for the first time during the first quarter of 2004.