The sales were underpinned by a more buoyant fleet market, where demand increased by 7.5 per cent. However, the downward trend in the retail market continued, with private sales falling by 13 per cent.
The SMMT figures show that 191,186 cars were sold in January, compared with 198,525
in the same month last year.
Ernie Thompson, SMMT chief executive, said: "Last week's rise in interest rates is likely to make private purchasers increasingly reluctant to come to market."
January is the second-most important month for car sales, behind the August registration changeover, and accounts for about 10 per cent of the total.
At this rate, expected sales in 1995 of 1.9 million would be similar to the figure for last year. The industry had been looking for a rise of 5 per cent.
Analysts warned against reading too much into one month's figures, but were not expecting any short-term jump in sales. There is also evidence that buyers are increasingly turning to the second-hand market for purchases of nearly-new cars.
David Gent, director-general of the Retail Motor Industry, said: "If speculation of rises in interest rates can produce a 13 per cent fall in sales to private buyers in what should have been a very buoyant month, then I remain deeply concerned over the impact of last week's further upward move in rates."
The SMMT figures showed that importers accounted for 58 per cent of sales last month, against 54 per cent a year ago.
Sales of commercial vehicles totalled 21,801, up 23 per cent on January 1994.