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LONDON, Feb 6 (Reuters) - British new car registrations rose 3 percent in January according to a car industry body's figures, spurred on by the first annual increase in demand from private consumers since March despite fears Brexit would hit sales.
A total of 174,564 new cars were registered last month in Europe's second largest market, the Society of Motor Manufacturers and Traders said on Monday, boosted by a five percent increase in sales to individual consumers.
Analysts predict the British car market will shrink by around five percent in 2017 after two years of record high demand and due to the Brexit-related fall in the pound pushing up the price of some models.
But the chief executive of one of Britain's biggest dealership chains Lookers told Reuters key economic fundamentals remained in place to drive demand.
"The deals are good, unemployment is low and they are the things that have driven growth," Andy Bruce said.
Demand from business customers for fleet cars, the biggest proportion of overall registrations, also returned to growth in January after falling marginally in December.
Bruce suggested that an increase in excise duty which will be paid on many new car sales due to come into force in April might be bringing forward some demand to the first three months of the year.
"There will be an element of pull-forward in my view that people will be clamouring to get what's available today rather than ordering cars that will fall into quarter two," he said. (Reporting by Costas Pitas; editing by Michael Holden)