There has been a rise in alternatively-fuelled vehicles, up to 32.1 per cent.
Private and business buyers drove this growth with demand for new cars up by 8.2 per cent to 73,061 and five per cent to 6,716 units respectively, while the fleet sector declined slightly by 1.1 per cent to 89,901.
January 2016 marked the highest number of cars registered to private buyers in January in 12 years.
Mike Hawes, SMMT chief executive, said: “January’s solid performance puts the new car sector in a good position to start the year.
“Providing consumer confidence remains strong, we expect a more stable 12 months ahead, broadly similar to 2015 which was, of course, a record year.”