UK car production and commercial vehicle production rose by 8.9% in January.
Engine manufacturing also saw a 12% increase in the first month of 2011.
Paul Everitt, SMMT chief executive, said: “The encouraging figures demonstrate ongoing growth in global demand for the high quality vehicles and engines manufactured in the UK at some of the world’s leading sites.
“Automotive is leading the manufacturing revival, but to ensure this positive trend continues, the Government must prioritise UK manufacturing, through a supportive tax system, plus sustained investment in skills, R&D and capital equipment.”
Ahead of the Budget in March, SMMT is urging the Chancellor to provide research and development tax credits for small and large companies, to increase capital allowances and to reflect the sector’s importance through the business rates system.