SMMT Update – Global partnership can drive UK Auto growth
2025 was a tough year for UK vehicle manufacturing with a combination of plant restructuring, trade uncertainties, economic weakness in key markets and, of course, a major cyber incident at a key manufacturer all limiting output. Against that backdrop, the industry’s resilience should not be underestimated and December’s growth in car production augurs well for 2026.
Underlining the scale of the transition underway, a record share of cars made last year were electrified (41.7%). With production of the next generation volume electric car in Sunderland ramping up, and a further six new EV models set to start production this year, the outlook is positive. Independent analysis suggests overall vehicle production will hit 824,000 units this year with the potential – and it is only potential – to reach one million units by 2027. Such a recovery relies on new model launches staying on track and the right business conditions being set.
Fundamental to this will be the delivery of the government’s Industrial and Trade Strategies. Rightly recognising automotive as a cornerstone of the UK economy, these strategies are backed by some £4bn in transformation funding. But delivery is critical. That means tackling the UK’s persistently high energy costs, supporting the domestic supply chain, and ensuring a healthy – and sustainable – domestic market for OEMs providing new vehicles, notably EVs.
As an export-led industry, global partnerships are essential in attracting manufacturing investment, so this year we must also safeguard free and fair trade with our most important markets including the EU, US and China, while maximising new deals with the likes of South Korea and India. This week, SMMT and our members supported the Department for Business and Trade’s visit to Pune, India for the Symposium on International Automotive Technology as part of a trade mission that also included OEM site visits, B2B meetings and networking, providing UK automotive businesses with opportunities to expand overseas – bringing economic benefits back home.
Inward investment, however, is not just about manufacturing. We want the UK to be at the forefront of innovation and technology deployment. Symbolic of this is self-driving technology, and this week’s announcement that Waymo will be rolling out its automated taxis in London this September is a major win, ahead of any other European location. This will be a landmark moment, tangibly translating the ambition of the UK’s advanced regulatory framework into a social and mobility revolution.
It underlines the real-world benefits that come when industry and government work together, aligning ambition and innovation – and 2026 can be the year the UK generates more momentum in its self-driving and EV transition, making our country more attractive for future investment.