The number of cars produced in the UK rose by a record 90.2 per cent in March, compared with the same month last year.

New data from the Society of Motor Manufacturers and Traders (SMMT) showed that some 177,622 units were produced last month, with manufacturing benefiting from scrappage incentives across Europe and an increase in consumer and business demand.

The March rise was the fifth consecutive month in which annual car production has risen, following a 62.7 per cent hike in production in February.

The number of commercial vehicles and engines produced also increased in March. Commercial vehicle output grew by 61.6 per cent with 13,046 vehicles produced, while engine production rose by 43.6 per cent year-on year.

According to the SMMT figures, total UK car production for the first three months of the year stood at 316,067, an increase of 73 per cent compared to the same period last year. As a result, the UK is currently the fourth largest automotive manufacturer in Europe.

Paul Everitt, chief executive of the SMMT, said: UK automotive production continued to make progress in March with strong growth in commercial vehicle, engine and car production.

Headline figures highlight the scale of challenges faced this time last year, but also demonstrate a steady improvement in demand in home and export markets.

However, he warned that the industry will continue to face tough market conditions following the closure of the government’s scrappage scheme and limited access to finance and credit for consumers and businesses.