Good December figures meant the number of new cars sold in 2009 dipped only 6.4 per cent compared with 2008, it was announced today.
Boosted by the Government's car-scrappage scheme, the number of new vehicles registered in 2009 was 1,994,999, the Society of Motor Manufacturers and Traders (SMMT) said.
Although this was the lowest year-end total since 1995, the final figure was well above the SMMT's original forecasts, helped by the fact that December 2009 sales were 38.9 per cent up on those of the same month in 2008.
The "cash-for-bangers" scrappage scheme, introduced in May, led to an upsurge in sales in 2009.
Monthly registrations had fallen for 15 successive months before they started rising again in July, with big increases in the months that followed.
SMMT chief executive Paul Everitt said today: "The December new car market was boosted by the scrappage scheme and consumers looking to avoid January's VAT increase.
"The 2009 market of 1,994,999 new car registrations was significantly above early expectations and reflects the positive impact of the scheme, due to end in February."
He went on: "Another tough year awaits the UK motor industry in 2010, with new car registrations expected to be below 2009 levels and only limited recovery in the van and heavy commercial vehicle markets.
"Sustaining the progress made in the latter part of 2009 will require stronger demand from fleet and business buyers, alongside the greater availability and affordability of credit and finance."
Since its introduction the scrappage scheme has accounted for more than a fifth of all new registrations and is reckoned to have represented more than 20 per cent of the December 2009 market.
While sales dipped nearly 26 per cent in the first half of last year, they rose 21% between June and December 2009.
Last month was the third best December on record and the highest since 2005.
But last year was still the first since 1995 in seeing new registrations dip below the two million mark. However, the final 2009 total was 337,000 more than the SMMT had forecast in April before the scrappage scheme was announced.
Now the concern is that sales will dip again when the scrappage scheme finishes. The SMMT estimate that 2010 sales will fall back to below 1.8 million.
The SMMT also announced today that, on average, new cars registered last year emitted 149.5g of CO2 per kilometre - a 5.4% reduction on 2008 levels.
These were the best-selling cars in 2009:
1. Ford Fiesta
2. Ford Focus
3. Vauxhall Corsa
4. Vauxhall Astra
5. Volkswagen Golf
6. Peugeot 207
8. BMW 3 Series
9. Vauxhall Insignia
10. Ford Mondeo