Strong sales of small cars have helped the Australian automotive industry to an encouraging sales result in the first half of 2006, the manufacturers' national trade association said.

Official VFACTS figures released by the Federal Chamber of Automotive Industries show that in the six months to June, a total of 483,160 motor vehicles were sold in the country.

The total, down just 3.4% on the record first half set last year, has been achieved despite highest-ever fuel prices and an interest rate rise.

"The result demonstrates the considerable underlying strength of the economy and in particular the confidence of the business community," said the Chief Executive of the FCAI CEO Peter Sturrock.

"Consumers seem to have shrugged off the interest rate rise and business vehicle buyers responded extremely well to the end of the financial year offers from the brands."

Sales of light and small cars finished the first half with solid June results.

Light car sales were up 9,298 vehicles or 19.6 % for the first six months compared with 2005.

Small car sales rose 2,994 vehicles or 2.8% for the period over last year.

The small segment leader, the Toyota Corolla, was also Australia's best selling car overall in June with 5,912 vehicles.

"The June results were a continuation of the strong trend towards smaller cars which has been evident for more than a year, and has clearly been accelerated by the recent substantial increase in fuel prices," said Sturrock.

"In broad terms, consumers remain enthusiastic about new car purchases, although clearly they are making different choices within the market."

The FCAI believes passenger car sales will be boosted in the second half by the launch of three new generation locally built passenger cars from General Motors unit Holden (Commodore) and Toyota (Camry [four-cylinder] and Aurion [V6]).

"We think there are lots of potential buyers - both private and commercial - who have been sitting out of the market awaiting these cars and the result will be a noticeable spike in sales towards the end of the year," noted Sturrock.

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