UK car manufacturing industry booming as production hits 12-year high with over 1 million units

UK new car sales have risen consistently for the past three yearsReuters

Britain's car manufacturing sector saw production exceed one million units for the first time since 2004 in the first seven months of the year, data released on Thursday showed. The Society of Motor Manufacturers and Traders (SMMT) said car production in the UK rose 7.6% year-on-year in July, bringing the total tally of cars produced in the seven months to July to 1.023m.

The SMMT added it was the first time since 2004 car production topped one million in July.

The increase in production was driven by higher demand in both the foreign and domestic market, with exports rising 6% year-on-year, and four out of five cars produced in the UK this year destined for overseas markets. Meanwhile, the output for the domestic market was 14% higher than in the corresponding period a year ago.

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"UK car production in 2016 is booming, with new British-built models in demand across the world," said SMMT chief executive Mike Hawes.

Before the European Union referendum, the "Remain" campaign had warned the automotive industry could suffer a sharp slowdown should Britain vote in favour of leaving the 28-country bloc, though the figures released by the SMMT look to have dismissed those fears.

However, Hawes warned that it was crucial for policymakers to ensure Britain remained "open for business" to ensure the sector's future.

"Manufacturers have invested billions to develop exciting new models and produce them competitively here in the UK," he said. "Future success will depend on continued new car demand and attracting the next wave of investment so Britain must demonstrate it remains competitive and open for business."

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