CAR sales hit a four-year-high last year as about two million new cars were sold in the UK.

The 5.3 per cent increase on 2011 was the biggest since 2001, with sales of new vehicles boosted by strong consumer demand, said the Society of Motor Manufacturers and Traders (SMMT).

Sales of new cars reached 2,044,609 over the year, with a 3.7 per cent increase last month alone compared with the same month in 2011.

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The market received a boost as corporate buyers began to renew their fleets after reining in their spending during 2011.

SMMT chief executive Paul Everitt said that the new car market grew last year at the fastest rate for more than a decade, driven by more fuel-efficient models.

The Ford Fiesta was the best-selling car of 2012, with more than 109,000 models being bought, followed by the Vauxhall Corsa, Ford Focus and Vauxhall Astra. The Volkswagen Golf came fifth, with the Sunderland-built Nissan Qashqai in sixth place.

The big losers include Renault, down 40.4 per cent on 2011, Alfa Romeo down 37.3 per cent and fell Mazda 16.1 per cent.

Last year’s healthy sales figures followed a 12.9 per cent increase in private demand for new cars.

Despite the strong performance of the motor industry, the new car market was 14.9 per cent below the pre-recession level of 2.4m sales in 2007.

Mr Everitt said: “More than two million new cars were registered in the UK during 2012, up 5.3 per cent on the previous 12 months and the best result since recession struck in 2008.

“Boosted by strong demand, the market grew at its fastest rate for 11 years with innovative, fuel-efficient cars keeping buyers in showrooms.

“Looking ahead to 2013, we anticipate the market will hold firm, with manufacturers and dealers working hard to deliver quality and value to motorists.”

The SMMT said this year would be challenging, but it expects performance to be on a par with last year.

Richard Lowe, head of retail wholesale at Barclays, was more cautious. “As we look to the year ahead, the real question is whether this demand will hold,” he warned.

“Consumer pockets will continue to be squeezed,” he said, before adding that “manufacturers and dealers will have to be careful that supply does not outstrip demand”.

Diesel cars took a record 50.8 per cent market share, with sales of just over a million compared with 978,000 petrol vehicles.

Sales of alternative fuel vehicles, such as electric, increased by 9.4 per cent to almost 28,000, a market share of 1.4 per cent, a new high.

Private sales of new cars increased from 823,000 to 929,000, fleet sales increased by 0.6 per cent to just over a million, while business sales fell by 9.5 per cent to just under 90,000.

The car industry is a major employer in the North-East, supporting an estimated 30,000 direct jobs, which includes about 5,400 at Nissan’s Sunderland plant; a network of suppliers and parts makers, which includes the likes of Nifco, Unipres, ElringKlinger and Vantec, as well as the region’s car sales showrooms.

The UK best-selling cars for 2012: Ford Fiesta 109,265, Vauxhall Corsa (89,434), Ford Focus (83,115), Vauxhall Astra (63,023), VW Golf (62,021), Nissan Qashqai (45,675), BMW 3 Series (44,521), VW Polo (41,901), Mercedes C-Class (37,261), BMW 1 Series (34,488).