UK vehicle manufacturing slumps amid global uncertainty

London – UK's new vehicle manufacturing declined by 11.9% year-on-year to 417,232 units in the first six months of the year, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT).

The decline was softened by a 6.6% increase in car production in June, said SMMT noting that last year’s production was negatively affected by model changeovers and supply chain issues.

Car output for the first six months fell by 7.3% year-on-year to 385,810, while restructuring at commercial vehicle production plants, namely Vauxhall’s factory in Luton, resulted in a first-half volume fall of 45.4% to 31,422 units.

While overall output fell, electrified car production rose by 1.8% to 160,107 units – delivering a record share of output for the first half of the year.

According to SMMT, hybrid, plug-in hybrid and battery electric vehicles accounting for more than two in five (41.5%) units produced in the UK in 2025.

UK car production remained export-focused, with 76.9% of output headed overseas year-to-date and greater certainty now returning to key markets.

The EU remained the main destination for UK car exports (54.4% share), followed by the US (15.9%) China (7.5%), Turkey (4.1%) and Japan (2.7%), with the five destinations accounting for more 80% of overseas sales.

June marked three straight months of declining export volumes, with the month registering an 18.7% year-on-year decline in exports.

The US maintained its position as the UK’s “biggest single export market”, said SMMT, underscoring the importance of the UK-US trade deal.

“That deal, which came into force on 30 June, gives the UK reduced tariff rates into the US automotive market, which can become a basis for future growth,” it said.

According to SMMT, the latest independent production outlook anticipates total vehicle output will fall by 15% to 755,000 units this year.

However, projections indicate a 6.4% increase in production next year would take total production to 803,000 units.

“Global economic uncertainty and trade protectionism have taken their toll on automotive production across the globe, with the UK no exception,” said Mike Hawes, SMMT chief executive.

The figures, he said, are “not unexpected but remain very disappointing.”

Hawes, however, pointed out that there are foundations in the market for a return to growth.

These include a move to technologies to support future mobility, the UK’s engineering knowhow and its highly skilled workforce as well as the country’s industrial strategy with advanced manufacturing and automotive at its core.

“With rapid delivery and the right conditions, UK automotive can reverse the current decline and deliver the jobs, economic growth and decarbonisation that Britain needs,” the SMMT chief concluded.