By Daniel Hunter

Data released by the Society of Motor Manufacturers and Traders (SMMT) today (Thursday) has revealed that the UK car manufacturing sector has hit a 16-month record high.

The official data showed that UK car manufacturing rose significantly by 15.6% in January to 127,382, showing clear signs that the economy is not going to slip back into recession.

With the last quarter of 2011 seeing the nation's growth slipping into the negative, there were genuine concerns that a second recession was on its way.

However, John Leech, Partner in KPMG’s Automotive practice, said that the SMMT figures showed that the car industry can help lead the country back into positive growth.

“Coming quickly on the heels of the promising UK new car sales figures last week, UK car production rose 15.6% in January 2012 on the back of strong demand for cars made in the UK and exports to developing economies such as China," he said.

"This raises hopes that 2012 could be the year that sees UK car production bouncing back to 2006 levels. I expect production to strengthen in 2012 to over 1.4 million new cars made in the UK this year.

“All in all we expect a gradually improving story throughout 2012. There are significant investments in new models and production capacity at a number of plants, notably at JLR and BMW. Despite the continuing threat of Eurozone macroeconomic uncertainty, there’s great potential for the UK auto industry to grow and develop from a manufacturing and supply-chain perspective."

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