The SMMT has announced that UK car production in December was up 58.5% on the same month of 2008 when volumes were exceptionally depressed.
December 2009 car production reached 85,316 units. A year earlier manufacturers were winding down production as demand slumped due to the impact of the international financial crisis.
For 2009 as a whole car production was down 30.9% on 2008 at 999,460 units.
UK car production this year was hit by lengthy furloughs and cuts to production by a number of manufacturers in the first half of the year as they sought to reduce stocks as demand slumped.
Looking on the bright side, the SMMT said that the December year-on-year rise to production - albeit off a very low base - was biggest rise since May 1976.
"The significant rise in December vehicle production is welcome news and signals some greater stability across global automotive markets," said SMMT chief executive Paul Everitt.
"We expect the year ahead to be extremely challenging, but the return of economic growth and a competitive exchange rate will help UK producers. Car and commercial vehicle production remain well below pre-recession levels and it is essential that there continues to be a focus on creating more and better priced finance for businesses and consumers."
UK commercial vehicle production in December was 7.271 units, 15.6% up on the same month in 2008. For 2009 as a whole, commercial vehicle production reached 90,679 units, 55.3% below 2008's tally.
The SMMT also announced that UK automotive engine manufacturers produced 2,053,456 engines in 2009.
Some 74.3% of all engines produced in the UK were exported.
Petrol engines accounted for 63% of total production versus 37% diesel.
"Despite the severe impact that the recession has had on the country's economy, there were twice as many engines built in the UK than new cars," said SMMT chief executive Paul Everitt.
"Most importantly, this underlines the significant role the UK plays in global automotive manufacturing and demonstrates the sheer scale of the motor industry in the UK."
UK: Vehicle output up 58.5% in Dec; down 31% for year
UK: UK car market to decline by 11% in 2010 – SMMT
The UK car market is forecast to decline by 11% in 2010 according to the SMMT.
The UK car market in 2009 reached almost 2m units and was boosted by a scrappage incentive which helped to kick-start the market.
Speaking at an online webinar, SMMT chief economist Robert Baker said that without the scrappage incentive the UK car market would have gone as low as 1.6m/1.7m units in 2009.
The forecast for 2010 is for the market to drop 11% to 1.777m units before rising to 1.859m units in 2011
"The UK economy is still adjusting to the economic situation," he said.
Baker pointed out that low interest rates, unexpectedly low unemployment and stable asset prices were all positives on the general economy. However, he maintained that there would be some post-scrappage 'payback' in 2010 and that some buyers would be holding off ahead of a general election and some uncertainty on interest rates.
He also pointed to medium-term concerns over the economy.
"The volume of GDP won't be getting back to where it was before the crisis until late 2012," he said.
"And at some point there is a further adjustment ahead for governments - like the UK's - with large fiscal deficits. That could further squeeze incomes. There is pick-up to economic growth ahead, but there is a degree of uncertainty ahead about the strength of the recovery and how it will play out."
However, Baker did hold out the hope that the market will recover to pre-crisis levels eventually, though not as far as the peak of 2.7m - recorded in 2002.
"There are concerns and some uncertainties about the economic adjustment taking place and the timescale," he said. "But there is no reason, provided the economic conditions are right - that financing comes back, that replacement cycles shorten, that the product is good and regulators aren't restrictive - that the market can't return to the 2.3m/2.4m unit level."
US/GERMANY: GM and VW in pole position for BRIC markets - study
Car sales in the so-called BRIC markets of Brazil, Russia, India and China will grow from 19m units last year to 27m units in 2014, according to a study by the Boston Consulting Group with General Motors and Volkswagen in the best position to take advantage of that growth because they are already well-established there.
"Auto companies cannot succeed in these markets by offering one-size-fits-all products, processes, or approaches," said Nikolaus Lang, the study's author.
The four emerging markets will challenge automakers' strategies over the past decade to push for global vehicle platforms because each country has different needs, the study said.
Auto sales in those four countries would grow between 4m and 8m units in the next five years to reach up to 27m units in 2014, when global auto sales are projected at 78-87m, up from an estimated 62m last year.
China, which overtook the US as the world's biggest market in 2009, will account for more than 60% of the expected sales volume in the countries, the study said.
GM and VW are the biggest players in China, where sales jumped 48% last year. "They (GM and Volkswagen) really went there and established local operations," Lang said.
He added latecomers would find it more challenging than before to make a profit in the increasingly competitive market.
