The figures released showed 143,884 new car registrations in July – the best this year. The SMMT welcomed the news and predicted that 1.97m cars would be sold by the end of the year, compared to 1.94m in 2011.

While the Ford Fiesta came in as the most popular model this year, other car manufacturers such as Bentley and Porsche fared well, with the latter reporting a 41% increase in sales on the same month in 2011.

Chief executive of the SMMT Paul Everitt said that part of the reason for the rise was motorists’ desire to reduce running costs by getting rid of older, fuel-hungry vehicles and buying newer, more efficient cars.

“International economic stability remains a concern for vehicle manufacturers and the UK market, but intense competition and new fuel-efficient products are creating great opportunities for motorists,” he said.

The UK automotive sector relies heavily on countries in the Eurozone – it makes up 60% of its export market. With the current uneasiness on the continent many car manufacturers are still worried, despite yesterday’s good news.