Data from the Society of Motor Manufacturers and Traders (SMMT) showed that 1.9 million vehicles were sold in 2023, an increase of 17.9% from a year ago. Year-on-year December new car sales grew 9.6%.
The new car market recovery was fuelled by fleet owners increasing investments as the previous year's supply constraints faded and deliveries rebounded by 38.7% year over year.
Last year also saw more battery electric vehicle (BEV) sales than the previous two years combined, with almost 315,000 new cars registered.
But the industry body warned that the next few months are also "likely to be volatile due to regulatory uncertainties" related to UK-EU Rules of Origin.
Last month, the European Union and Britain agreed to give electric vehicle (EV) makers until the end of 2026 to comply with local content rules, delaying the imposition of tariffs on EVs traded with the UK.
"Government has challenged the UK automotive sector with the world's boldest transition timeline and is investing to ensure we are a major maker of electric vehicles", SMMT Chief Executive Mike Hawes said.
However, the overall British new car market still lagged 17.7% below pre-pandemic levels, according to the industry data, which also showed that private consumer demand was on par with 2022 numbers as customers faced cost of living pressures and a high inflationary environment.
The SMMT will provide the final figures for December at 0900 GMT.
($1 = 0.7878 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Tasim Zahid)
