The UK new car market saw a 3.4% year-on-year increase in registrations during May, according to the Society of Motor Manufacturers and Traders (SMMT).

The increase was driven by a 10.1% rise in private registrations, with fleet registrations falling by 0.7%, and business registrations – classed as those made to fleets with fewer than 25 vehicles – down by 9.6%, although these make up a tiny fraction of the overall market.

Demand for diesel cars continued to plummet, with registrations down 23.6%, but this was offset by a 23.5% increase in demand for petrol cars and a 36.1% increase in registrations of alternatively fuelled vehicles, with the latter claiming their biggest ever market share of 5.8%. 

Included in this was a 72.7% increase for plug-in hybrids, a 22.6% rise for regular hybrids and an 18.7% rise for pure electric vehicles.

The SMMT cautioned that overall year-on-year growth, to 192,649 registrations, followed an 8.5% decline in the market last May, when demand was hit by changes to vehicle excise duty and uncertainty caused by the then-imminent General Election, but said there was still cause for optimism. 

SMMT chief executive Mike Hawes said: “May’s growth, albeit on the back of large declines last year, is encouraging and suggests the market is now starting to return to a more natural running rate. 

“To ensure long-term stability, we need to avoid any further disruption to the market, and this will require sustainable policies that give consumers and businesses the confidence to invest in the new cars that best suit their needs.

“Fleet renewal is the fastest way to improve air quality and reduce CO2, and this applies to hybrid and plug-in technologies as well as the latest low-emission petrol and diesels which, for many drivers, remain the right choice economically and environmentally.”