With March a key month for car sales thanks the new registration number, the industry was buoyed by a big rise in sales again in February.New car sales climbed 26.

With March a key month for car sales thanks the new registration number, the industry was buoyed by a big rise in sales again in February.

New car sales climbed 26.4pc last month to 68,686 units with private buyers leading growth, but business demand also strengthened.

The scrappage scheme accounted for 19.6pc of February's new car market and the Society of Motor Manufacturers and Traders is urging the government urged to defer new car vehicle excise duty rise and boost business confidence post-scrappage.

SMMT chief executive Paul Everitt said: 'Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme's closure later this month.

'The industry continues to face challenging market conditions, but positive trends in the fleet and business sectors suggest that negative impacts can be minimised. Strengthening business and consumer confidence remains industry's priority. A clear and consistent approach to CO2-based taxation and improved access to affordable credit are essential elements in sustaining recovery in the new car market.'

Last month's market was above expectations, just 1.3pc below February 2008's tally, but still 12.2pc off the 1999-2009 average.

March 2009 was particularly weak, down 30.5pc to 313,912 units but this month is expected to recover slightly, with volumes expected to push above 360,000 units for the new '10' plate. Over the past decade, March has been the strongest month for new car registrations, accounting for 17.8pc of annual registrations.

Much of the March recovery will be attributable to scrappage. Final orders through the scheme must be made by the end of this month, or sooner if funds run out. The scheme's impact will diminish during the second quarter of the year with market decline expected in the second half of 2010.

New car demand will be building up, after a sustained period of hold-off, but with economic recovery still fragile and uncertainty over the impacts of the Budget this month and a general election in spring, the outlook for registrations this year is subdued and cautious, with an expected decline of almost 10pc to 1.82 million units.