UK new car and commercial vehicle production dropped by 11.9% in the first half of 2025, with a total of 417,232 vehicles being made, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).
Although June brought a slight improvement, with car output rising 6.6% compared to the same month last year, when production had been slower due to model changes and supply chain disruption, year-to-date car production is still down 7.3%, totalling 385,810 units.
Commercial vehicle output had an even bigger drop, and was down 45.4% to 31,422 units. This drop is largely due to ongoing restructuring at key manufacturing sites.
Electrified vehicles, however, appear to be the exception. Hybrid, plug-in hybrid, and fully electric car production increased 1.8% to 160,107 units. That now means that these vehicles are making up 41.5% of all UK car production so far this year.
Exports continue to drive UK car manufacturing, with 76.9% of production destined for overseas markets. The EU remains the largest customer, accounting for 54.4% of exports, followed by the US (15.9%), China (7.5%), Turkey (4.1%), and Japan (2.7%). Despite three consecutive months of declining exports, including an 18.7% drop in June, the US remains the UK’s single biggest export market. A new UK-US trade deal that came into effect at the end of June, which reduces tariffs on British-made vehicles, could help stabilise and grow this key market.
As we move into the second half of 2025, total vehicle production is expected to fall by 15% over the full year to around 755,000 units. However, a recovery is forecast for 2026, with a projected 6.4% rise bringing output back above 800,000 units.
Support from the UK’s new automotive strategy, DRIVE35, alongside incentives like the £650 million Electric Car Grant, may help the industry recover. If this works out, domestic manufacturing will be strengthened and an additional £50 billion could be added to the UK economy.
“Global economic uncertainty and trade protectionism have taken their toll on automotive production across the globe, with the UK no exception. The figures are not, therefore, unexpected but remain very disappointing. However, there are foundations for a return to growth. The industry is moving to the technologies that will be the future of mobility, our engineering excellence, highly-skilled workforce and global reputation are strengths, and we have an 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.”
Mike Hawes, SMMT Chief Executive
Read more automotive industry news
Leave a Reply
You must be logged in to post a comment.