The number of cars built in the UK topped 1.5 million last year, the highest for six years, amid "surging" demand at home and abroad, with vehicles rolling off a production line every 20 seconds, new figures have revealed.
Production increased by 3.1% in 2013, with analysts predicting that output would reach record levels of around two million by 2017.
The Society of Motor Manufacturers and Traders (SMMT) said the UK was set to become the third largest car manufacturer in Europe after Germany and Spain.
Four out of five cars built in the UK last year were exported, with strong demand reported in China, the United States and Russia.
Mike Hawes, SMMT chief executive, said: "2013 demonstrated the value of the UK's diverse car manufacturing industry, as surging home demand and robust exports outside Europe saw output grow 3.1% to over 1.5 million units.
"UK automotive investment announcements exceeded £2.5 billion in 2013, reinforcing industry analysts' suggestions that the UK could break all-time car output records within the next four years."
Business Secretary Vince Cable said: "Today's figures are another sign that the British car industry is going from strength to strength, with one vehicle rolling off a production line somewhere in the UK every 20 seconds.
"Our success lies in the appetite from countries around the world for British cars.
"Around 80% of the 1.5 million cars we produced last year were exported - a testament to the diverse, high quality of British manufacturing.
"It also highlights the benefits of industry and government working together and we want to continue this partnership through a long-term strategy.
"This will give businesses the confidence to invest, speed up development on vehicles of the future and keep the UK as a world leader in cars.
"Our investment of £1 billion jointly with industry will help do this, while also delivering jobs and driving growth."
Nissan built the most cars - over half a million - at its plant in Sunderland last year, followed by Land Rover (340,000), Toyota (179,000), Mini (174,000), Honda (138,000), Jaguar (78,000) and Vauxhall (73,000).
The news comes a day after Nissan's new Qashqai model came off the production line, which has helped create 500 new jobs in Sunderland, where the workforce is set to increase to over 7,000 for the first time.