January saw new car sales rise by over seven per cent to 23 651 when compared with units sold in the same month in the previous year.

A motor industry analyst and economist from Econometrix said that over the past four years, January had become a strong month, probably because of growth in residual value-linked finance deals which sucked demand from the fourth quarter of each year.

While sales of new light commercial vehicles declined by 0,6 per cent when compared with the same month last year, both the medium commercial vehicles and heavy truck sales had increased.

Heavy truck sales increased by a whopping 35 per cent and this could grow to 5 per cent for the year, indicative of business confidence and the need to replace ageing vehicles.

Volkswagen said that the new car market appeared to entering its fifth year of buoyant demand which was encouraged by higher rates of economic growth, more positive business sentiment and constraint in new vehicle pricing.

These views were echoed by McCarthy Motor Holdings who believed that demand was being stimulated by the absence of prices increases and low interest rates.