Car manufacturing rose in the UK during April, boosting hopes that the economy will emerge from recession in the second quarter of the year.
Figures published by the Society of Motor Manufacturers and Traders (SMMT) point to an 11.8 per cent rise in output last month.
Commenting on the findings, KPMG's UK head of automotive, John Leech, said the sector continues to buck the economic trend.
"There were 11.8 per cent more cars built in the UK so far this year than in the same period last year," he noted.
Mr Leech said the sector had also been boosted by the news that General Motors has committed to build the new Astra at its Ellesmere Port plant on the Wirral.
"This is welcoming news for the region and reflects an overall resilient UK motor industry," he stated.
“This announcement follows a series of similar notices by other motor manufacturers so that now all car plants in the UK have long-term production plans in place."
Mr Leech suggested that high skill levels, a weak pound and recent tax initiatives have made the UK the most cost-competitive of all developed countries for car production.
“Of course we should not rest on our laurels, the eurozone crisis means that car companies and their supply chain should be making contingency plans for a possible Greek exit from the euro," he stated.
"In particular, we recommend reviewing long-term supply contracts now with Greek suppliers."
In addition, for those with operations in Greece, it is important to create buffer liquidity and inventory to deal with any transition to a new currency, Mr Leech suggested.
A rise in car manufacturing will be seen as good news for the overall economy, in light of the UK's descent into recession during the first three months of 2012.
The Office for National Statistics reported a 0.3 per cent contraction in gross domestic product between January and March, which meant the economy entered a double-dip.
Coalition ministers have repeatedly stressed the importance of the economy rebalancing towards the private sector, so the latest figures from the SMMT could help build confidence going forwards.
Posted by Dan Smith