Car production falls amid ‘perfect storm’ for industry

Car production has fallen amid warnings that the industry is facing a “perfect storm”.

The number of vehicles built in the UK last month fell by 17% compared with last January, said the Society of Motor Manufacturers and Traders (SMMT).

Factories turned out 71,104 cars and 6,908 commercial vehicles, which the SMMT said reflected weakness in important markets such as the EU, China and the UK itself.

Production of battery electric, plug-in hybrid and hybrid vehicles increased by 1.5% to 30,028 units, accounting for 42.2% of all cars made in January, the highest monthly performance since December 2022.

Exported

Four out of five cars built in the UK were exported, with the EU remaining the most important region, taking just over half of exports, followed by the US (18.6%), China (6.2%), Turkey (3.5%) and Japan (3.4%).

The SMMT said there was a slower than expected rollout of new models as manufacturers responded to softening demand in the UK and other key markets.

Chief executive Mike Hawes said: “UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected.

“The sector is doing all it can to keep production plans on track but needs Government to ensure automotive is at the heart of its forthcoming industrial and trade strategies, with promised funding invested as soon as possible.

“Doing so will help ensure our competitiveness and safeguard the billions of pounds of investment, jobs and economic growth which is now at stake.”

Car and commercial vehicle production was down by 17.7% to 78,012 units in January compared with “bumper” first-month figures for both sectors last year, said the SMMT.

Global challenges

A UK Government spokesperson said: “We recognise the global challenges car manufacturers face, and we are working closely with businesses across the sector to ensure the UK remains a top destination for investment in automotive manufacturing.

“This government will continue to support our world-leading automotive industry, and its continued success has a big role to play in our mission to grow the economy.

“We’ve already backed the sector with over £300 million to drive uptake of electric vehicles and £2 billion to support the transition of domestic manufacturing announced in the Budget.”