Output rose by 7.6% in July compared to the same month last year, to 126,566, amid double digit growth for home and export markets, the Society of Motor Manufacturers and Traders (SMMT) said.
The number of cars built totalled 1,023,723 in the first seven months of the year, the first time the one million milestone was reached in July since 2004.
Exports were up by 6% last month, with a 14% rise in output for the domestic market.
More than three-quarters of a million cars built in the UK this year were for overseas markets - almost four out of five of all cars manufactured.
Mike Hawes, SMMT chief executive, said: "UK car production in 2016 is booming, with new British-built models in demand across the world.
"Manufacturers have invested billions to develop exciting new models and produce them competitively here in the UK.
"Future success will depend on continued new car demand and attracting the next wave of investment so Britain must demonstrate it remains competitive and open for business."
Business and energy secretary Greg Clark said: "Our automotive sector continues to go from strength to strength thanks to our highly-skilled workforce and long-term investment in new technology and innovation.
"This government's comprehensive industrial strategy will build on that success, ensuring that we have the right infrastructure, skills and support in place for our world-leading industries as well as support for new emerging sectors to flourish."
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