Vehicle production steadies but sector faces rising trade protectionism
UK vehicle production fell -1.2% in April to 58,513 units, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). Car output was broadly stable for a second consecutive month, down just -0.7% to 56,135 units, while commercial vehicle (CV) output fell -10.9% to 2,378 units – its smallest decline for 13 months as the effect on numbers of the closure of one of the UK’s biggest van plants ceases. The overall performance still, however, reflects wider model changeovers and challenges in some key global markets.
Exports continued to drive production, accounting for 76.4% of all vehicle output in the month. An -8.2% decline in CV shipments was offset by 1.1% growth in cars produced for global markets, resulting in an overall 0.8% boost to outbound trade. The EU remained the top global destination for cars, taking more than half (53.2%) of exports, with shipments up 6.9% to 23,103 units. Exports to the US also rose, up 6.8% to 7,558 units, but deliveries to China fell -44.4% to 2,081 units.
In the year to date, UK factories have produced 266,601 vehicles, down -10.7% year on year. Car output is down -5.4% to 257,024 units, while CV production has declined -64.1% to 9,577 units.
The news comes as the sector urges action to ensure the EU’s recently proposed ‘Made in Europe’ policy does not restrict UK-produced vehicles, parts, batteries and raw materials from accessing their largest export market. Given the deep integration of UK and EU automotive supply chains, such a move would damage competitiveness, disrupt investment and weaken manufacturing capability on both sides of the Channel.
Both sides already face the looming threat of tariffs when more onerous rules of origin requirements for electric and plug-in hybrid vehicles take effect in January 2027. Both issues, if not resolved, would put an €80 billion-a-year trading relationship at risk, posing a major threat to the wider European automotive industry at a time of fierce global competition.
Mike Hawes, SMMT chief executive, said, “April’s figures suggest production is stabilising, albeit at reduced levels, when the ambition remains to grow the sector. UK manufacturers still face high costs, notably in energy, and uncertainty in the trading relationship with key trading markets. More serious is the UK sector’s carve out from the EU’s ‘Made in Europe’ proposals which, coupled with tougher rules of origin requirements from next year, risk undermining the industry on both sides. The forthcoming EU-UK Summit must address these issues and deliver solutions that safeguard our mutual competitiveness and growth.”
