New figures released by the Society of Motor Manufacturers and Traders (SMMT) show that a total of 119,882 cars were produced in the UK last month, an increase of more than a fifth (22%) compared to the same month in 2011.
The latest figure takes the total for 2012 up to 875,998, 15% more than at this time last year.
Commercial vehicle production fell by 1.3% to 9,004 in July, while engine production dropped by 1.9% to 180,109.
However, overall engine production rose by 0.3% in the first seven months of 2012 compared to the same period last year, and there were 7.7% fewer commercial cars produced in the same period.
Paul Everitt, chief executive of the SMMT, said: "Car manufacturing continued to perform well, with output up more than 22% for the month and 15% for the year to date.
"While uncertainty in Europe remains a challenge, the £6 billion investment committed to the UK in the last two years delivers long-term growth opportunities and the latest figures show that our products have enormous global appeal."
The figures also showed that four in five cars (80%) built in the UK are exported.
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