The Motor Industry Assocation says new vehicle sales are increasing, despite a 30% drop in the number of commercial vehicles sold last month.
Chief executive Perry Kerr says the number of new passenger cars sold rose slightly in July.
He says 4473 new passenger cars were sold in July, compared with 4306 in June.
Mr Kerr says the market has been steadily improving since April, when new car sales fell to a low of 3500.
He says 1267 commercial vehicles were sold in July.