The data also shows the strongest December in a decade with 108,721 cars produced, up 27.1% on December 2013.

The SMMT added that the growth comes despite challenges in some export markets.

Output for the UK market matched the growth in overall UK registrations, rising 8.0%.

Mike Hawes, SMMT chief executive, said, ‘Placed in context, a 1.2% growth in UK car manufacturing in 2014 represents a very successful year. The industry has overcome various challenges, including slower than expected EU recovery and weakness in some global markets.

‘More than £7 billion of investment into UK production facilities has been announced in the past two years, and we are now seeing the effects as new models begin production – with more expected in 2015. UK car manufacturing is now more diverse than ever, with a unique combination of volume, premium and specialist brands giving our products truly global appeal. This is epitomised by the doubling of car export values in the decade from 2005 to 2014.’

Business Secretary Vince Cable added: ‘These production figures are testament to the strength of our automotive industry, and show that even in tough economic conditions it continues to be one of the driving forces behind our economic recovery. From Sunderland to Goodwood, Britain is turning out cars that are in demand all around the world.

‘The UK’s automotive industry is thriving with a new car rolling off the production line every 20 seconds, while increasing levels of investment are helping to secure local jobs. Through the government’s industrial strategy we are backing the automotive industry as it goes from strength to strength.’

Phil Harrold, automotive expert at PwC, said: ‘The 2014 production figures show the continuing success of UK car production with annual volumes in excess of 1.5 million being maintained.

‘Around 80% of UK car production is exported therefore the success of UK producers is heavily influenced by the economic fortunes of its export destinations. 2014 saw moderate growth in new vehicle registrations in the big three European car destinations: France achieved 1.1% growth, Germany, 2.6% and Italy, 4.3%. Spain showed significant growth of 18%, albeit from a low base.  

‘UK car production falls into two categories: volume production mainly aimed at the European market as well as luxury/niche products which service the global economy. This latter category has continued to perform strongly with the US market remaining buoyant. China remains a very strong market for the luxury car exporter.

‘Investment in UK manufacturing continues to grow and 2015 will see a large number of new model launches as well as a commitment from the government to provide £11.3 million of matched funding to the Automotive Council skills development initiative.

‘The key determinants for how the sector will perform in 2015 will be the success of the new Jaguar XE launch as well as the impact of the quantitative easing packages announced yesterday by the European Central Bank. As ever, the key to success in automotive manufacturing rests in having the right product available and a willing and confident car buying market.’