Figures have shown that rates of car production recorded a 90.2% year-on-year increase during March, indicating a surge in new car insurance policies.
According to the Society of Motor Manufacturers and Traders (SMMT), as many as 117,622 cars were manufactured last month - a record for any month.
A total of 13,046 commercial vehicles were produced in March 2010 - marking a 61.6% rise on the same period last year.
After a fall in automotive production at the beginning of 2009 due to the economic meltdown, the latest increase reflects a fifth straight month of growth.
The production rise means that far more people will be buying new vehicles - leading to a rise in the number of insurance policies.
SMMT chief executive Paul Everitt said: "UK automotive production continued to make progress in March with strong growth in commercial vehicle, engine and car production.
"Headline figures highlight the scale of challenges faced this time last year, but also demonstrate a steady improvement in demand in home and export markets."
However the SMMT warned tough market conditions would continue, partly due to the end of the Government's car scrappage scheme.
Meanwhile, limited access to finance and credit for consumers and businesses will also affect the motor industry.
© Press Association 2010