Britain’s car industry has suffered a sharp downturn, with vehicle production plummeting by 17.7% in the first month of the year, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
Factories across the country churned out just 71,104 cars and 6,908 commercial vehicles (CVs) in January – a far cry from the bumper output seen at the start of last year.
The dramatic drop comes after a 21.0% surge in car production and a 27.5% jump in CV output in January 2024. But with demand weakening in major markets – including the EU, China, and even the UK itself – manufacturers have been forced to cut back.
Industry insiders blame a combination of Labour’s policies, economic uncertainty, sluggish EV adoption, and planned model changeovers for the lacklustre start to 2025.
Alarming Decline in Domestic Market
The figures make for grim reading:
- Home market production collapsed by 30.5% – from 23,901 units in January 2024 to just 16,613 last month.
- Export output also fell – down 13.4% to 61,399 vehicles.
- Overall, UK vehicle manufacturers turned out 78,012 units, compared to 94,811 in the same period last year.
Despite the gloomy figures, there was a glimmer of hope in the form of Britain’s electric and hybrid car production. Manufacturing of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles rose slightly by 1.5%, hitting 30,028 units – making up 42.2% of all cars produced in January. This represents the highest share since December 2022, when 47.2% of UK car production was electrified.
Exports Still Key, but Europe and China Lagging
With the UK market struggling, manufacturers remain reliant on exports. A staggering 80.4% of all cars built last month were shipped overseas, yet even this lifeline is showing signs of strain. Overall export volumes slid 9.2% to 57,140 vehicles.
The EU remains Britain’s biggest buyer, taking a 52.0% share of UK-built cars. However, exports to Europe fell by 11.2%, while shipments to China collapsed by a staggering 46.3%. Meanwhile, exports to the US, Turkey, and Japan bucked the trend, rising 12.4%, 36.9%, and 8.1%, respectively.
The UK’s commercial vehicle sector was also hammered by the downturn, with CV exports plunging 46.6% as demand from Europe dried up. A staggering 97.1% of all exported vans, trucks, taxis, buses, and coaches went to the EU, but volumes fell sharply, exacerbating the industry’s woes. The home market didn’t fare much better, with CV production for UK buyers down 31.1%.
Crisis Mounting – Industry Demands Government Action
The figures come as manufacturers grapple with plant restructuring and slower-than-expected rollouts of new models, all while demand softens in key markets. Industry leaders are now calling on the government to act fast to prevent further decline and protect the UK’s position as a global manufacturing powerhouse.
The SMMT is urging ministers to prioritise the automotive sector in upcoming industrial and trade strategies, while also accelerating the release of the £2 billion pledged for the Automotive Transformation Fund. Without swift action, experts warn that Britain risks falling behind competitors, jeopardising its status as the largest exporter of manufactured goods.
Mike Hawes, SMMT Chief Executive, Issues Stark Warning
SMMT boss Mike Hawes didn’t mince his words, warning that UK vehicle producers are battling a “perfect storm”of global trade uncertainty, tough manufacturing conditions, and an EV transition that is proving far more challenging than anticipated.
“The sector is doing all it can to keep production plans on track,” he said. “But we need government to ensure automotive is at the heart of its forthcoming industrial and trade strategies, with promised funding invested as soon as possible.”
Hawes added that urgent support is essential to “safeguard billions of pounds of investment, protect jobs, and ensure economic growth.”
Britain’s Car Industry at a Crossroads
With a £50 billion growth opportunity at stake over the next decade, Britain’s car industry is at a critical juncture. Will Labour step up and give manufacturers the backing they desperately need, or will the UK’s once-proud automotive sector continue to slide into decline?
Only time will tell – but one thing is clear: without decisive action, Britain’s manufacturing future is on the line.
Source: SMMT
Scrap Net Zero.
The reason “EV transition is proving far more challenging than anticipated” is that they are trying to foist on people a product that is nowhere near as performant as the one they already have – at twice the price.
All for an ideology based on computer models. Ask the Bank of England how well that works.