The number of new cars sold last month was 1.7 per cent down on May last year at 150,431 registrations, new figures show.

Sales for the first five months of 2011 fell 7.3 per cent to 846,513 units said the Society of Motor Manufacturers and Traders.

Chief executive Paul Everitt said: "New car registrations for May were down just 1.7 per cent on 2010 levels, with strong performances in the fleet and business sectors.

"Consumers remain cautious but with significantly improved fuel economy, service plans and more affordable finance there is great value on offer across the market."

New car sales have now fallen for 11 months in a row, but the Society of Motor Manufacturers and Traders said May's decline was the smallest since registrations began to contract in July last year.

The SMMT predicted that the market will stabilise in the third quarter of the year and the full-year market will total 1.93 million sales in 2011, a decline of around 34,000 units.

Registrations of supermini cars posted their first rise in registrations since last June, while sales of executive luxury saloons and dual-purpose cars showed the best growth rates during May.