The British automotive market has defied predictions of a sales slump after recording a 6.6 per cent surge in new registrations in March, the Society of Motor Manufacturers and Traders (SMMT) has announced.

Despite forecasts of a 2.5 million drop, the SMMT said it was now considering raising its estimate for 2004 above the all-time-high of 2.57 million car registrations achieved last year.

The surprise figures mean the car market is now on course for yet another year of record sales - what would be the fourth in a row.

Christopher Macgowan, the SMMT chief executive, commented: "The growth in a record first quarter has surprised everyone.

"If the market continues to be strong, and the underlying economic outlook remains positive, we may well need to revise our forecast in the months to come."

The SMMT believes that only a heavy rise in interest rates would thwart the car market from remaining "steady".

The prospering market condition has been partly attributed to the pressure exerted by competition authorities, which has forced UK dealers to bring their prices in line with other parts of Europe.

The Ford Focus remained the best selling car last month, with 23,190 sold. Vauxhall's Corsa took second place with registrations of 20,750.