The growth was driven by strong domestic demand, as exports fell slightly, something SMMT Chief Executive Mike Hawes blamed on a weaker than expected recovery in the euro zone and elsewhere.

"More than 7 billion pounds of investment into UK production facilities has been announced in the past two years, and we are now seeing the effects as new models begin production -- with more expected in 2015," Hawes said.

Britain is a major centre for manufacturers such as Jaguar Land Rover (>> Tata Motors Limited), BMW (>> Bayerische Motoren Werke AG), Nissan (>> Nissan Motor Co Ltd), Honda (>> Honda Motor Co Ltd), Toyota (>> Toyota Motor Corp) and General Motors (>> General Motors Company).

(Reporting by David Milliken; Editing by Robin Pomeroy)