UK car production saw a 7.6% decrease in the first half of the year, according to data released by the Society of Motor Manufacturers and Traders (SMMT). Factories produced 416,074 units, down by 34,094 compared to the same period in 2023. This drop follows a 26.6% decline in June, attributed to multiple model changes as manufacturers retool for electrified vehicle production after a significant £23.7 billion investment in the sector last year.
Electrified vehicle production, including battery electric, plug-in hybrid, and hybrid models, also fell by 7.6%, aligning with the overall production decline, resulting in 157,224 units. These electrified vehicles now constitute 37.8% of the total output, maintaining the same proportion as last year.
Despite a 17.7% increase in car output for the UK market, reaching 106,157 units, this was insufficient to balance a 13.9% drop in export production. More than 70% of cars produced were destined for overseas markets. The EU remains the most crucial market for UK car exports, accounting for 55.4% of all exports in the first six months, equivalent to 171,745 units. The US, China, Turkey, and Australia rounded out the top five export destinations, together making up 29.4% of all exports, with Japan, Canada, South Korea, UAE, and Switzerland completing the top ten.
Mike Hawes, SMMT chief executive, emphasized the rapid transition to electric vehicles as a potential growth driver for the UK economy. He highlighted the government’s commitments to gigafactories, a decarbonized energy supply, and an accelerated planning system as crucial for maintaining competitiveness and employment in the auto sector.
“The UK auto industry is moving at pace to build the next generation of electric vehicles – a transition that can be a growth engine for the entire British economy,” Hawes stated. “Amid fierce global competition, industry and government must work quickly to deliver those commitments, creating an industrial strategy that enables the growth the economy craves.”
The latest independent production outlook indicates that UK light vehicle production will decline by 9.3% this year to around 910,000 units due to structural changes in British plants. However, production is expected to rebound to over 1.1 million units by 2028, with more than half of UK car and van production projected to be zero-emission by the decade’s end, reaching approximately 1.167 million units.
With favorable political, industrial, and economic conditions, the UK could produce over nine million zero-emission light vehicles by 2035, exceeding current projections by 600,000 units and generating over £290 billion in factory gate prices.
SMMT’s “Vision 2035: Ready to Grow,” published in June, outlines a strategic plan to foster these conditions, focusing on expanding the domestic EV market, industrial transformation, reskilling the workforce, providing clean energy, and ensuring free and fair trade with global markets. This plan aligns with the government’s new industrial strategy and Automotive Sector Plan, positioning the industry and government to collaborate for the long-term success of the sector and those reliant on it.