A surge in demand at sports-car company Caterham has been reflected in the national car sales market, with UK production jumping more than 90 per cent in March compared to 12 months earlier.

“Bouyant” sales of Caterham’s lightweight two-seater means the firm will be ramping up capacity at its production plant by a quarter, as well as boosting production staff by 20 per cent.

The nationwide increase is the fifth month of growth in the sector following a huge drop-off in production at the beginning of last year - a period which saw major manufacturing cutbacks throughout the industry.

More than 117,000 cars were built in March 2010, and just over 13,000 commercial vehicles - an increase of 61.6 per cent on March 2009, according to the Society of Motor Manufacturers and Traders(SMMT).

Ansar Ali, managing director of Caterham Cars, said: “Despite the economic background we have recorded an extremely positive sales period.

“Adding to our capacity merely underlines our position in the market.”

The firm, which has its UK headquarters in its namesake town, has seen consistently strong UK sales boosted by a rapid rise in overseas demand over the past 12 months.

Mr Ali said: “The export market has certainly been boosted by the exchange rate, but more decisively by our success in achieving European Type Approval last year and the launch of the Ford Duratec powered Roadsport 175.

“Collectively they have combined to deliver for us.”

SMMT chief executive Paul Everitt said the “solid” exchange rate and “world class competitiveness” of the UK car industry should help sustain more long-term demand.

He said: “Headline figures highlight the scale of challenges faced this time last year, but also demonstrate a steady improvement in demand in home and export markets.

“Industry will continue to face tough market conditions with the Scrappage Incentive Scheme closing and limited access to finance and credit for consumers and businesses.”

The SMMT has urged the next Government to increase support for the UK car industry after the May 6 election, through incentives championing research and development and maximising skills available in the UK.