Key facts
- UK vehicle production decreased by 7.5% in the first half of the year.
- A total of 385,979 vehicles were produced, 31,000 fewer than the previous year.
- Domestic car output saw a 13% decline, while exports fell by 5.6%.
- The SMMT cited tariffs, high energy costs, and EV mandates as significant challenges.
- The zero-emissions vehicle mandate requires 30% of cars sold to be emissions-free, rising to over a third next year.
British car manufacturers produced significantly fewer vehicles in the first half of the year, with production falling by 7.5% compared to the same period in 2025, according to the Society of Motor Manufacturers and Traders (SMMT).
Total production dropped to 385,979 vehicles, a decrease of 31,000 units. The decline was more pronounced in domestic output, which fell by 13%, while export production saw a 5.6% decrease. However, exports showed a slight recovery in the second quarter, rising by 3.9% from the first three months of the year.
SMMT chief executive Mike Hawes attributed the challenges to global market weakness, trade pressures, and uncompetitive costs, warning that the UK industry is no exception to these global pressures. The trade body highlighted that over three-quarters of cars built in the UK are exported, with Europe being the primary market and the US the second largest, despite tariffs imposed by President Donald Trump impacting trade volumes.
The SMMT urged for urgent action to address headwinds such as high industrial energy prices and the government's ambitious zero-emissions vehicle mandate. This mandate requires automakers to sell an increasing proportion of electric cars annually, with current regulations phasing out combustion engine and hybrid cars entirely by 2035. The SMMT warned that current regulations are ahead of consumer demand, making UK sales costs untenable and discouraging manufacturing investment.
Concerns were also raised about protectionist measures from the European Union, including rules of origin and 'Made in Europe' provisions, which could further disadvantage UK exporters. Hawes called for urgent action on energy costs, regulatory reform, and improved international trading arrangements to ensure the sector's return to growth across all UK regions.