UK vehicle production experienced a significant downturn in January, with total output falling by 17.7% compared to the same period last year, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT).
Factories across the UK produced 71,104 cars and 6,908 commercial vehicles (CVs), bringing the total to 78,012 units. This decline follows a strong January 2024, where car and CV production surged by 21.0% and 27.5% respectively, highlighting the volatility in the sector.
The drop in production reflects weakened demand in key markets, including the EU, China, and the UK itself, coupled with planned model changeovers at several manufacturing sites.
Notably, car exports, which constitute 80.4% of overall production, decreased by 9.2% to 57,140 units. Domestic production for the UK market saw a more substantial decline, falling by 30.4% to 13,964 units.
Despite the overall downturn, production of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles showed resilience, increasing by 1.5% to 30,028 units.
Electric vehicles accounted for 42.2% of all cars produced in January, marking the highest monthly performance since December 2022 (47.2%).
The EU remains the largest market for British-built cars, absorbing 52.0% of all car exports. However, shipments to the EU decreased by 11.2%.
Exports to China saw a dramatic drop of 46.3%. Conversely, exports to the US, Turkey, and Japan increased by 12.4%, 36.9%, and 8.1% respectively, showcasing a varied export landscape.
Commercial vehicle production also experienced a sharp decline, with a 46.6% drop in exports, totalling 4,259 units, of which 97.1% were destined for the EU.
Domestic truck and van production fell by 31.1% to 2,649 units. It’s important to note that these figures are compared to an exceptionally strong January 2024, which saw record-breaking CV output.
The SMMT attributes the production decline to plant restructuring, notably with the Stellantis plans to close the Luton van factory, and delays in new model rollouts, as manufacturers respond to softening demand in key markets. The industry is now calling on the government to prioritise the automotive sector in its forthcoming industrial and trade strategies.
Industry leaders are emphasizing the need for a healthy domestic market, particularly for electric vehicles, which are crucial for attracting investment. They are also urging the government to expedite the release of the £2 billion Automotive Transformation Fund, aimed at boosting the sector.
This support is deemed essential to safeguard the competitiveness of the UK’s largest exporter of manufactured goods, a sector poised to contribute £50 billion to UK growth over the next decade.
“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." said Mike Hawes, SMMT chief executive.
