The Australian motor vehicle market remained slightly softer in May, with sales finishing just 0.6% down on the record for the month set last year.

According to the Federal Chamber of Automotive Industries (FCAI) 83,457 cars trucks and buses were sold last month - 497 vehicles or 0.6% down on May 2005.

"When considered against the backdrop of recent high fuel prices and last month's interest rate rise, the performance of the motor vehicle market is very encouraging," said FCAI chief executive Peter Sturrock.

He said that, despite these adverse factors, the projected annual sales total for 2006 is still tracking very close to the chamber's forecast of 980,000 - slightly down on last year's all-time record.

Year-to-date sales totalled 383,712 at the end of May - down 11,221 vehicles or 2.8% on the same period last year.

"The consumer appetite for new cars - particularly new small cars - remains very healthy and we could see the motor vehicle market regain a little ground in the second half of the year when the recently announced tax cuts take effect," said Sturrock.

Fuel prices continued to influence buying patterns last month, with sales of light cars up 29.2% and small cars up 9.9% on May last year.

Year-to-date, light car sales have grown more than any other segment of the market - up 8,553.

Sales of sports utility vehicles are down 6,729 or 8.8% year-to-date while the large car segment is down 15,106 or 21.6%.

In contrast to the general market trend towards smaller, more economical vehicles, sales of four-wheel-drive 'utes' [utilities or pick-up trucks] are growing strongly.

The pick-up/cab-chassis 4x4 segment was up 12.1% in May and year-to-date is up 10.2% or 2,466 vehicles.

"The strong sales of four-wheel-drive utes indicates both the continuing confidence of the business community but also that a lot of these vehicles are being bought [for] personal recreational use," said Sturrock.

Toyota was the top-selling brand in May with 18,310, followed by General Motors' Holden with 12,012 and Ford with 11,145.

Year-to-date Toyota now leads Holden by 21,435.