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The UK new car market dipped 1.6% in January by year-on-year comparison, with 161,013 models leaving the forecourts.

Figures released by the Society of Motor Manufacturers and Traders (SMMT) also showed increased demand for electric vehicles, up 26.3% year-on-year. Petrol demand also grew in January, up 7.3%, but this was not enough to offset another month of decline for diesel, as registrations fell -20.3%.

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The performance by electric vehicles supports the latest forecast for this sector, currently expected to rise more than a quarter by the end of 2019 to around 177,000 units. Some 86,000 of these cars are set to be ultra low emission plug-in hybrids and battery electrics – taking plug-in market share to around 3.7%.

Following a decline in December, private buyers returned to showrooms – up 2.9% – registering 71,378 models in the month. Demand from business and fleet buyers fell by -33.5% and -3.4% respectively.

Mike Hawes, SMMT chief executive, said: “It’s encouraging to see car registrations in January broadly on par with a year ago as the latest high tech models and deals attracted buyers into showrooms. This, however, is still the fifth consecutive month of overall decline in the market.

“To restore momentum, we need supportive policies, not least on vehicle taxation, to encourage buyers to invest in new, cleaner vehicles that best suit their driving needs – from the latest petrols and diesels to an ever growing range of exciting electrified vehicles. This would be good for the environment and good for the industry and those who depend on it.”

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The best selling car of the month was the Ford Fiesta, with 5,399 vehicles registered. Coupled with the Ford Focus the marque had the two best-selling vehicles, while Volkswagen and Mercedes both had two models in the top ten.

Yearly data from the SMMT showed a 6.8% drop in new car registrations in 2018, which the industry body attributed to factors including WLTP regulation, falling consumer confidence causing a slump in diesel sales, and uncertainty about the effects of Brexit.