Figures released by the SMMT show that the diesel share of the new car market reached its highest ever level at 45.3% in November.

Overall new car registrations once again bettered expectations, SMMT said, with volumes up 2.2 per cent compared to this time last year. However, they are still a long way from 2004 levels.

"2007 has seen the new car market recover slightly, but we are still a long way from the records set in 2003," said Christopher Macgowan, SMMT chief executive.

"It is really encouraging to see the growth in diesel registrations, and this is expected to exceed 40 per cent of the total market by the end of 2007. New diesel engines are around 20 per cent more fuel-efficient than a petrol equivalent - good news for the motorist at times of rising fuel costs, and it also means a similar saving on CO2 emissions - good news for the environment too."

The SMMT says that the UK car market in 2007 looks set to surpass 2.4 million registrations, higher than forecast at the beginning of the year.