The UK new car market hit a new record in 2001 as registrations reached 2,458,769 units, up 10.7 percent on 2000, beating the previous record set in 1989 by 6.9 percent or 157,825 cars.

SMMT chief executive Christopher Macgowan said: “’In each month of 2001, the new car market grew with the previous year-end record, set in 1989, falling by the end of November. December’s figures, which saw growth of 17 per cent, are really the icing on the cake.

“This was a year in which the sun shone on new car buyers with a more competitive market than ever before and a raft of enticing new models to tempt the buying public. Many commentators have waited for the market to cool, but I’m delighted that this hasn’t happened.”

Private buyers – as distinct from company or fleet buyers – led the market growth during 2001 with sales up 22 percent.

Analysts point to a favourable market environment in 2001 but urge a little caution in interpretation. Interest rates have been extremely low and and new car prices have been declining. But industry margins are historically very low.

Nigel Griffiths, analyst at DRI-WEFA, said: “Margins are low, but at the same time, the UK market remains one of the most profitable in Europe and it’s still a ripe target for importers such as PSA.

“The outlook is for the market to decline in 2002 by 8 percent to around 2.27 million units as the economy slows, house prices weaken and prices stabilise. Also, interest rates could rise.”