More than 39,800 new cars were sold in January, according to the Society of the Irish Motor Industry, which was 33.5% higher than the amount sold in the same month of 2015.
It marks the best January for the industry since 2008 and comes on the back of significant growth last year when almost 125,000 cars were sold.
SIMI expects this growth to continue through the next eleven months, and is predicting total sales of over 150,000 in 2016.
With a 12.7% share of sales, Hyundai was the most popular brand of car last month – a distinction that usually goes to Volkswagen.
Meanwhile, Hyundai’s Tucson was the best selling model – replacing Volkswagen’s Golf which fell to 5th place.
January the first key sales period in Ireland since it was revealed that Volkswagen had cheated emissions tests on some of its vehicles in the United States as well as Europe.
And emissions remain a key selling point for car buyers, as 78.2% of vehicles sold in January fell into the ‘A’ band of motor tax.
More than 69% of cars sold were diesel fuelled, with almost 29% running on petrol.
Petrol Electric car sales rose significantly – albeit from a low base - to made up 1.5% of sales, however the number of electric engine cars halved when compared to January 2015.
Car sales added €1.2bn to Exchequer
Car sales contributed €1.2bn to the Exchequer last year, according to the SIMI / DoneDeal Quarterly Motor Industry Review of 2015, which was published alongside the January sales figures.
The vast majority of this came from new car sales, with less than €144m being taken in from imported vehicles.
In total motorists contributed €5.4 billion to the Exchequer last year, according to the report, when the range of taxes applied are taken into account.
However motorists would have seen their costs fall during the year, with petrol prices down 8.2% and diesel prices falling by 11.4% when compared to the last three months of 2014.
The cost of a new car was also down by 2.9% - however a lot of these savings would have been undone by the 30.7% rise in the cost of the average motor insurance policy.
The report cites Central Statistics Office figures to show that there were 43,400 people employed in the industry last year – while the number of apprenticeships has risen sharply.