A strong Australian dollar and robust competition have led to record national vehicle sales, which the industry has described as astonishing.
Despite the weakness in several parts of the economy in 2012, new vehicle sales rose 10.3 per cent to more than 1.1 million.
The previous record of 1.05 million was set in 2007.
The Federal Chamber of Automotive Industries chief executive Tony Weber says carmakers are pleasantly surprised by the result.
"10 per cent is actually an astonishing number," he exclaimed.
Mr Weber says the strong Aussie dollar helped make imported cars cheaper.
"I think the increase in sales reflects the fact that the market in Australia for cars is so competitive, prices are so low and it's probably the best time in a very long time to buy a car in Australia," he said.
"The price index shows that it is actually cheaper in 2012 than it has ever been before to buy a car." Mr Weber says the high Australian dollar helped intensify competition, but locally made cars also performed well.
"Three of the top 10 selling cars in Australia in 2012 were actually produced in Australia," he added.
Passenger cars were still the most popular type of vehicle, although Mr Weber says SUV sales surged 25 per cent with over 300,000 sold.
"A lot of SUVs now have diesel technology which reduced their fuel consumption quite dramatically," he observed.
Toyota secured the largest share of sales, with nearly 220,000 new vehicles hitting the roads last year.
Holden, Mazda, Hyundai and Ford rounded out the top five.