SMMT boss Paul Everitt said: “Renewed business confidence fuelled month-on-month rises, while innovative developments in vehicle design and technologies provided solid business reasons for companies to upgrade in 2011.”

But Everitt warned there was no cause for complacency going into the new year and urged the Government to deliver its growth strategy to boost business and consumer confidence.

Growth in December was driven by strong sales of medium and heavy vans – volumes of pick-ups, 4x4s and vans weighing less than 2.0-tonnes were all down year-on-year.

In the full year all segments were up compared to 2010 with the dominant heavy van sector accounting for 147,840 sales – 57% of the total market.