UK vehicle production faced a decline of 17.7% in the first month of the year, with factories producing 71,104 cars and 6,908 commercial vehicles (CVs) for a total of 78,012 units, as reported by the Society of Motor Manufacturers and Traders (SMMT).
This decrease in production can be attributed to various factors, including weakness in key markets such as the EU, China, and the UK itself, as well as planned model changeovers. Last year, January witnessed a significant surge in car and CV output, with an increase of 21.0% and 27.5%, respectively.
Despite the overall decline in production, the UK saw an increase of 1.5% in the production of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles, reaching a total of 30,028 units. These vehicles accounted for 42.2% of all cars manufactured in January, marking the highest monthly performance since December 2022.
Export played a significant role in UK vehicle production, with 80.4% of cars produced destined for international markets. However, export volumes witnessed a decline of -9.2% to 57,140 units, while production for the UK market fell by -30.4% to 13,964 units.
The EU remained the largest global market for British-built cars, receiving more than half (52.0%) of car exports, followed by the US (18.6%), China (6.2%), Turkey (3.5%), and Japan (3.4%). While exports to the EU and China experienced a decline, shipments to the US, Turkey, and Japan increased.
In the commercial vehicle sector, export demand continued to drive production, with 61.7% of UK CVs being shipped overseas. However, there was a year-on-year decline of -46.6% in export volumes, with 97.1% of CVs destined for the EU market.
The decline in production comes amidst plant restructuring and a slower rollout of new models in response to softening demand in key markets. The automotive industry is urging the government to prioritize the sector in its industrial and trade strategies to safeguard investments, jobs, and economic growth.
Mike Hawes, SMMT Chief Executive, emphasized the challenges faced by UK vehicle producers, calling for government support to ensure the competitiveness of the automotive sector and protect billions of pounds of investment at stake. The industry is looking for immediate funding to secure production plans and navigate the ongoing market transition.
