The Society of Motor Manufacturers and Traders said the increase meant sales were up by 7.0 percent in the first six months of the year, although it expected slower growth later this year.

The SMMT said low interest rates, attractive finance deals and a wealth of new models had encouraged consumers to buy new cars.

"(It) is encouraging to see more consumers choosing British models. This is important for the wider economy with 799,000 people now employed across the UK automotive sector, including retail," said SMMT chief executive Mike Hawes.

"We anticipate a flatter second half of the year as the market finds its natural running rate."

(Reporting by Andy Bruce)

Stocks treated in this article : Ford Motor Company, Volkswagen AG, General Motors Company