During March, car production has increased by more than 142,000 units, up from 12% last year with the increase spurred on by demand from Europe.

The figures were released by the Society of Motor Manufacturers and Traders (SMMT) who said that production was about 3% higher on 2013.

Demand from Europe accounts for about half of the UK’s car exports, and currently car production makes up about 15% of the UK’s overall manufacturing output.

However, output fell earlier this year, as some manufacturers adjusted their production lines to produce new models of cars.

Chief executive of SMMT, Mike Hawes commented on the figures: “After several years in the doldrums, European demand for new cars is now picking up with growth in the last seven months. This is a welcome boost for the UK’s volume manufacturers for whom Europe is the key market.”

He added that the growth rate was a “significant step forward” after the product changes that happened at the beginning of the year. In addition to this, he said that the sector remains on course to reach all-time record levels of output by 2017.

These promising figures comes after the news that sales of new cars had risen last month at their highest pace for more than a decade. There were almost 465,000 new car registrations made during March 2014, showing that this was really a successful month for the car industry.