Australia's vehicle market is continuing to show a strong performance with the August market up 8% on last year and heading for another record.

The industry has one million sales firmly in its sight for this year.

The Federal Chamber of Automotive Industries (FCAI) said in its VFACTS sales bulletin that 88,206 new vehicles were sold last month, up 8% on the 81,661 retailed in the same month last year.

That took demand to the end of August to 698,873 vehicles, an 8.8% gain on the same period in 2006.

It also meant the sector was on track to sell one million vehicles in 2007, passing the milestone for the first time in a calendar year.

FCAI chief executive Andrew McKellar said the industry had shrugged off any immediate impact from recent interest rate increases.

"Strong consumer confidence, fierce retail competition and new model activity have been powering the Australian car market at record levels throughout the year," Mr McKellar said.

"The million vehicle market is now a reality and not withstanding a longer-term reaction to the recent rate rise or other factors, I am confident that the market will continue to comfortably exceed this benchmark through to the end of the year."

Toyota was the top selling company again last month with 20,938 vehicles compared to 12,209 by Holden and 9,544 by Ford.

In the first eight months Toyota has retailed 156,508 vehicles, well ahead of Holden on 100,671 and Ford on 72,851.

Holden had the top selling car in August with the VE Commodore retailing 4,899 units - ahead of the Toyota Corolla on 4,673 and the Ford Falcon on 2,973.