UK new car registrations rose 0.03% to 128,853 units in January according to the Society of Motor Manufacturers and Traders (SMMT).

But diesel and alternate-fuel cars increased volumes, up 6.3% and 17.7% respectively.

The new car market is expected to remain stable in 2012, dipping just 1% to 1.92m units in 2012, before recovering in 2013, the SMMT said.

“The January new car market held firm with 128,853 registrations, marginally up on January 2011, a welcome sign of stability in uncertain economic times,” said chief executive Paul Everitt. “2012 is set to be an exciting year with record numbers of new models coming to market filled with innovative technology that will save the motorist fuel, enhance comfort and further increase levels of safety and security. However, to maintain market stability, government must act decisively and deliver much needed confidence to businesses and consumers.”

January typically accounts for around 7% of annual registrations, ahead of the key March market, which typically represents 18% of the annual market and approximately 65% of volumes registered in quarter one.

Demand for diesel cars continued to rise and market share moved from 50.5% a year ago to 53.7%, as buyers sought increased fuel efficiency. Registrations of alternate fuel vehicles rose 17.7% in the month and accounted for 1.6% of the market, mirroring the record levels confirmed in November and December 2011, on the back of new products entering the market.

The Ford Fiesta was the best selling model in January 2012. Four of the top sellers were B-segment superminis and the segment showed the largest rise in volume during January. Growth in demand in luxury, dual purpose, executive and sports segments was also evident.

SMMT revised down its full year forecast of the new car market in 2012 to 1.92m units, a 1.1% drop on the 1.94m sales in 2011.

"The economic outlook remains weak and continues to make the new car market challenging but new and more efficient products should provide support to volumes as we move forward through 2012. The market is expected to grow to 1.98m units in 2013," SMMT said.