UK Vehicle Manufacturing Endures 'Toughest Year in a Generation' with 15% Output Decline
The UK automotive sector experienced a significant downturn in 2025, with overall vehicle production falling by 15% compared to previous years. According to the latest report from the Society of Motor Manufacturers and Traders (SMMT), this represents the most challenging period for the industry in a generation.
Production Figures Reveal Substantial Decreases Across the Board
The SMMT data shows that 717,371 cars were manufactured in UK factories throughout 2025, marking an 8% decrease from the previous year. Commercial vehicle production saw an even more dramatic decline, plummeting by 62% to just 47,344 units. These figures underscore the considerable pressures facing the manufacturing sector.
Multiple Factors Contribute to Production Constraints
Several key issues converged to hamper output during the year. A major cyber attack targeted Jaguar Land Rover, bringing production at one of Britain's most important manufacturers to a complete standstill. Additionally, fresh tariffs on transatlantic trade created new barriers for exporters, while ongoing restructuring efforts as facilities transition towards decarbonisation further complicated operations.
Electric Vehicle Segment Shows Promising Growth
Amid the overall decline, the manufacturing of electrified vehicles provided a bright spot. Production of battery electric, plug-in hybrid, and hybrid vehicles increased by 8.3% to nearly 300,000 units. This achievement meant that electrified vehicles captured a record 41.7% share of total UK car output, demonstrating the sector's shifting focus towards sustainable transportation.
Export Markets and Recovery Forecast for 2026
Europe remained the dominant export destination, accounting for 56% of UK vehicle exports. The United States followed with 15%, while China secured 6.3% of exported vehicles. Looking ahead, the SMMT forecasts a substantial recovery for 2026, with overall car production expected to surge by more than 10%. This optimistic projection is bolstered by the scheduled introduction of seven new electric vehicle models this year.
Industry Leadership Calls for Supportive Conditions
Mike Hawes, SMMT chief executive, described 2025 as "the toughest year in a generation for UK vehicle manufacturing." He emphasised that while structural changes, new trade barriers, and the cyber attack constrained output, the outlook for 2026 points towards recovery. Hawes highlighted the importance of creating the right competitive conditions for investment, reducing energy costs, avoiding new trade barriers, and fostering a healthy domestic market to ensure long-term growth. He noted that the government has outlined support through industrial and trade strategies, with 2026 becoming a crucial year for delivering on these commitments.
