Car production in the UK in 2013 rose to its best level since 2007, according to the trade body the Society of Motor Manufacturers and Traders.
The SMMT says production rose 3.1% from 2012 and more than 1.5 million cars were made, one every 20 seconds.
It said sales surged at home and world demand was robust.
The SMMT is predicting the UK could become Europe's third biggest car maker, behind Germany and Spain.
It says carmakers in the UK could break all time production records by 2017.
Nissan made more than 500,000 cars in Sunderland while Jaguar Land Rover increased production by 11%.
But those firms more focused on the weak European market, such as Vauxhall and Honda, saw demand fall.
Since 2007, car exports to Europe have fallen 20% while those to the rest of the world have soared.
Four out of five cars built in the UK were sold abroad, with strong demand coming from China, the US and Russia.
SMMT chief executive Mike Hawes 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 £2.5bn 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: ""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."
Nissan built the most cars, more than 500,000, at its plant in Sunderland, with Land Rover making 340,000, making it the next biggest producer.
Toyota manufactured 179,000, Mini 174,000, Honda 138,000, Jaguar 78,000 and Vauxhall 73,000.