Good December figures meant the number of new cars sold in 2009 dipped only 6.4% compared with 2008, much better than the industry had expected.
Boosted by the Government's car scrappage scheme, the number of new vehicles registered in 2009 was 1,994,999, the Society of Motor Manufacturers and Traders (SMMT) said.
Although this was the lowest year-end total since 1995, the final figure was well above the SMMT's original forecasts, helped by the fact that December 2009 sales were 38.9% up on those of the same month in 2008.
The “cash-for-bangers” scrappage scheme, introduced in May, led to an upsurge in sales in 2009.
Monthly registrations had fallen for 15 successive months before they started rising again in July, with big increases in the months that followed.
SMMT chief executive Paul Everitt said: “The December new car market was boosted by the scrappage scheme and consumers looking to avoid January's VAT increase.
“The 2009 market of 1,994,999 new car registrations was significantly above early expectations and reflects the positive impact of the scheme, due to end in February.”
He added: “Another tough year awaits the UK motor industry in 2010, with new car registrations expected to be below 2009 levels and only limited recovery in the van and heavy commercial vehicle markets.
“Sustaining the progress made in the latter part of 2009 will require stronger demand from fleet and business buyers, alongside the greater availability and affordability of credit and finance.”
The best selling cars of 2009 were the Ford Fiesta, Ford Focus, Vauxhall Corsa, Vauxhall Astra and Volkswagen Golf.
Since its introduction the scrappage scheme has accounted for more than a fifth of all new registrations and is reckoned to have represented more than 20% of the December 2009 market.
While sales dipped nearly 26% in the first half of last year, they rose 21% between June and December 2009.
Now the concern is that sales will dip again when the scrappage scheme finishes. The SMMT estimate that 2010 sales will fall back to below 1.8 million.