UK Car Production Collapses to Lowest May Since 1949 as Labour’s Industrial Promises Stall

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The Labour party came to power promising an industrial revival, instead, it’s presiding over a historic collapse in one of the UK’s flagship manufacturing sectors.

Labour needs to change track as new figures show UK car and commercial vehicle production has fallen for the fifth consecutive month in May, down -32.8% to 49,810 units.

The UK’s automotive industry has suffered a severe blow, with new figures revealing total car and commercial vehicle production fell by 32.8% in May 2025, marking the lowest May output since 1949 — excluding the Covid shutdowns of 2020. Year-to-date, production has plummeted 12.9%, the weakest showing since 1953. These figures arrive just under a year into Labour’s tenure, raising serious questions about the government’s industrial priorities.

The decline is being driven by multiple factors: model changeovers, a major commercial vehicle plant closure, and a 25% tariff imposed by the US in March, which caused exports to America to collapse by over 55%. However, Labour cannot simply hide behind external forces. The party came to power promising an industrial revival — instead, it’s presiding over a historic collapse in one of the UK’s flagship manufacturing sectors.

Despite the Conservative Party securing over 70 trade deals, some of these agreements are only now nearing implementation and key insiders suggest in the last year Labour has failed to stimulate homegrown demand or give manufacturers the confidence to maintain production.

Critically, the government has so far refused to offer targeted incentives to support domestic vehicle purchases, such as fleet renewal grants, EV subsidies, or scrappage schemes. At the same time, it has done little to address the industry’s urgent concerns over energy costs, which remain among the highest in Europe and directly erode UK competitiveness.

The result is a double blow: falling exports and collapsing domestic consumption. Exports to China (-11.5%), Turkey (-51%), and even the EU (-22.5%) are all down. Export volumes of vans, buses, taxis, and trucks dropped by 71.7%, with commercial vehicle production now relying more on the weak domestic market than ever before.

While Labour has recently published its Industrial and Trade Strategies, industry leaders are calling for more than paper promises. The Society of Motor Manufacturers and Traders (SMMT) has urged rapid action on energy reform, market access, and above all, incentives to boost local sales. Without immediate and practical support, the UK risks further decline — and with it, thousands of jobs in advanced manufacturing.

Labour still has time to act. But the longer the party delays meaningful intervention, the harder it will be to reverse what is now a deepening industrial crisis.

For more details check out SMMT here.