New car sales soared in March as the UK motor industry continued to recover.

The Society of Motor Manufacturers and Traders (SMMT) revealed that a total of 397,383 new cars were sold last month, a rise of 26.6 per cent from the same period last year.

The SMMT said the increase was due to the extension of the government's car scrappage scheme, which accounted for 12.2 per cent of all March registrations .

The Ford Fiesta was the top-selling model over the four-week period, followed by the Ford Focus and the Vauxhall Astra .

According to the SMMT, the number of car registrations for the first quarter of 2010 is up 27.3 per cent on the same period last year.

SMMT chief executive Paul Everitt said: The UK motor industry has enjoyed a better than anticipated first quarter of 2010. A strong March performance was underpinned by the scrappage incentive and improving demand in the fleet sector.

But he warned that the coming months will remain challenging, with registration numbers likely to drop.