British car sales reached a record level in the first half of this year and are on track to scale a new high in the full year, the society of motor manufacturers and traders said yesterday.

Sales, which dipped last month to 239,077 from 240,174 a year ago, were up 2.2% at 1.38m in the first six months and the society said the market should hit 2.6m in 2004 as a whole.

This would be marginally above last year's record 2.58m sales, despite a series of interest rate rises and efforts by car manufacturers to raise prices, offset by cheap financing deals.

The booming British market, poised for a fourth successive year of record sales, is outpacing that of mainland Europe where demand - especially in Germany - remains sluggish.

Among the main beneficiaries are diesel-powered cars, which now account for just under a third of all sales, and foreign imports - which make up almost 82% of the market.

Ford, the traditional market leader, is now selling just under 15% of all cars, with Vauxhall capturing 12.8%, Renault 7.4%, VW 6.9%, Peugeot 6.6% and Toyota 4.7% in the first half.

BMW, with a 3.6% share, now outsells its former British subsidiary, MG Rover, which has 3.28%.