According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), car production output in the UK experienced a significant surge of 31.6% in October. This marked the eighth consecutive month of growth in 2023, with a total of 91,512 units leaving factory gates, representing the best October performance since 2019.
The growth in car production follows recent announcements of substantial investments in advanced automotive manufacturing, totaling £4 billion in November alone. This surge in investment reflects a considerable vote of confidence in the UK’s automotive sector.
The October production figures reveal growth in both domestic and overseas markets, with a 23.9% increase in production for the home market and a more substantial 33.4% increase in production for overseas markets. Export-driven output was particularly notable, with over 82% of cars (75,343 units) shipped abroad, while 16,178 cars remained in the UK.
The growth in exports was fueled by increased shipments to the EU, up by 58.5%, maintaining its position as the largest market, accounting for nearly two-thirds of exports (65.2%). Turkey also saw significant growth, almost quadrupling its market share to become the third-largest market, surpassing the US, China, and Japan.
Furthermore, the production of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles in the UK increased by 52.1%, representing 40.1% of all cars produced in the month. Since January, UK factories have produced 287,408 of these models, contributing to an overall car production increase of 16.7% to 751,422 units.
Mike Hawes, SMMT chief executive, expressed optimism about the UK automotive sector’s future, citing significant investment announcements and a commitment to transform the industry for a decarbonized future. He highlighted the recent Advanced Manufacturing Plan, Battery Strategy, and the government’s £2 billion commitment to advanced automotive manufacturing as positive indicators for the industry’s competitiveness.
The latest independent light vehicle production outlook has been revised up in light of strong manufacturing performance and recent investments. It anticipates UK vehicle makers producing 1,008 million cars and light vans in 2023, an 18.0% increase from the previous year, with further growth expected in 2024.
However, the industry faces challenges related to EU-UK rules of origin requirements for batteries, set to get tougher from January 1, 2024. The potential application of tariffs on electric vehicles traded between the UK and the EU poses a risk to electric vehicle production and sales, urging parties to find a pragmatic solution to delay implementation until 2027.