In 2025, manufacturers hope that they will hit one million vehicles again, but getting to pre-pandemic levels would require major investment and new makers to come to the UK.
Firms are worried that the UK is falling behind the US and the EU when it comes to providing state aid to manufacturers.
One of the benefits of leaving was to be escaped from the straitjacket of EU state aid rules which limited the amount of support governments could give to favoured industries.
The UK could be in the unenviable position of not giving more support to key industries than we did before we left the EU, according to Mr Hawes.
The SMMT said the figures were impacted by the closure of Honda's factory in Swindon in July 2021 and the Vauxhall Astras no longer being made at Ellesmere Port since April 2022.
The figures show how tough 2022 was for UK car manufacturing, although the country still makes more electric vehicles than ever before, according to Mr Hawes.
He said that the potential for this sector to deliver economic growth by building more zero emission models is self-evident, but we must make the right decisions now.
He said that this means shaping a strategy to drive rapid upscaling of UK battery production and the shift to electric vehicles based on the UK automotive sector's fundamental strengths - a highly skilled and flexible workforce, technical innovation and productivity levels that are among the best in Europe.
In the country last year, record levels of electric cars were also made, with almost a third of all cars being fully electric or hybrid.
Last year, export volumes were down 14% compared to 2021, which was not enough to offset the UK volume increase of 9.4% with around two in ten cars sold in the country.