The Society of Motor Manufacturers and Traders (SMMT) has released figures covering new car registrations in March, revealing that 449,287 new cars were registered in the month.
This is 3.1 per cent more than in March 2006 and represents the second highest number for the month since the twice-yearly number plate scheme was implemented.
Demand for superminis has been on the increase in 2007, with a 6.6 per cent rise in the number of these models registered in the first quarter of the year.
Diesels have been similarly popular with 264,186 registered in the first three months of the year â€“ 7.8 per cent more than in 2006.
Christopher Macgowan, chief executive of the SMMT, said that the popularity of these vehicles demonstrated that fuel efficiency and green motoring are now "critical concerns" for buyers.
"The industry has been working hard to improve its environmental profile too. CO2 from tailpipes has reduced dramatically across all bar one of the sales segments since 1997 showing a net 12 per cent reduction of CO2 across the whole market," Mr Macgowan added.
"The recent Department for Transport ‘Act on CO2’ consumer campaign is a welcome further step in a more integrated approach to sustainable motoring."