During the month there were 56,737 cars made, but the number built for the UK market reached a five-year high, boosted by the government's 'cash for bangers' scheme.
The Society of Motor Manufacturers and Traders (SMMT) called for the government to extend the scheme, warning the motor manufacturing industry was still 'extremely fragile'.
Chief executive of SMMT Paul Everitt said: 'The scrappage incentive scheme has had a positive impact on car production with one in three cars built in the UK last month for the home market and total volumes starting to stabilise.
'However, underlying demand remains weak and the recovery is still extremely fragile. A continuation of the scrappage incentive scheme through to the original close date of 28 February 2010 would help to sustain growth and bridge uncertainties associated with the ending of VAT discount.'
Cars for export were down 37 per cent, and a third of those produced were for the home market. The number of commercial vehicles produced fell by 48.5 per cent, although this was the smallest drop of the year so far.
The scrappage scheme, which was announced in this year's budget, pays £2,000 incentive to car buyers who scrap in their older car when it is more than ten years old.
However, funding for the scheme is quickly running out and business secretary Lord Mandelson has already stated it will not be extended.
'The continued fall in commercial vehicle output reflects ongoing weakness in the market. Specific action is needed to address business confidence and encourage investment in new business vehicles,' Mr Everitt added.
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