The UK’s automotive sector saw a big decline in production at the start of 2025, with total output dropping by 17.7% to 78,012 units. According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), this includes a 14.3% decrease in car production to 71,104 units and a 41.5% drop in commercial vehicle (CV) output to 6,908 units.
Weaker demand in key regions such as the EU, China, and the UK, along with planned model changeovers, have had a big impact on production.
EV Production Rises
Despite the drop in overall output, the production of electrified vehicles saw a slight increase. The output of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles rose by 1.5% to 30,028 units, making up 42.2% of all cars built – the highest proportion since December 2022.
Exports continue to drive UK car manufacturing, with 80.4% of production destined for overseas markets. However, export volumes dipped by 9.2% to 57,140 units, while production for the domestic market took a bigger hit, falling 30.4% to 13,964 units.
The EU remained the top destination for British-made cars, accounting for 52% of exports. However, shipments to the EU and China fell by 11.2% and 46.3%, respectively. In contrast, exports to the US, Turkey, and Japan increased, with rises of 12.4%, 36.9%, and 8.1%, respectively.
Commercial Vehicle Sector Faces Steep Drop
The CV sector saw an even sharper decline, with export demand, historically the main driver of UK van, truck, and bus production, falling 46.6% to 4,259 units. Domestic CV production also dropped by 31.1% to 2,649 units. However, these figures are in comparison to a particularly strong January last year, which saw the highest CV output since 2008.
Mike Hawes, SMMT Chief Executive
“UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected. The sector is doing all it can to keep production plans on track but needs government to ensure automotive is at the heart of its forthcoming industrial and trade strategies with promised funding invested as soon as possible. Doing so will help ensure our competitiveness and safeguard the billions of pounds of investment, jobs and economic growth which is now at stake.”
Industry Calls for Government Action
With manufacturers navigating a challenging market and investing heavily in new technologies, industry leaders are calling on the UK government to strengthen industrial and trade strategies. Key priorities include measures to boost domestic EV adoption, which is critical for securing future investment.
The sector is also urging the quick release of the £2 billion Automotive Transformation Fund, aimed at supporting the transition to electric vehicle manufacturing. With the UK automotive industry positioned as the country’s largest exporter of manufactured goods, these steps could help drive £50 billion in economic growth over the next decade.
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