UK Car Production Hits Lowest Level Since 1953 Amid Export Tariff Uncertainty and Factory Closures

UK vehicle production has fallen to its lowest level since 1953, with outputs of new cars and vans in the first half of the year plunging 11.3% year-on-year. Passenger car outputs are down 7.3% to 385,800 units, while commercial vehicle manufacturing has sunk 45% due to Stellantis' decision to shutter its Vauxhall Luton factory. The decline is attributed to uncertainty over export tariffs, Jaguar's cessation of car production, and Mini's shift to China. However, the industry hopes this marks the nadir, with recent advances such as the US-UK tariff deal potentially boosting confidence.

UK vehicle production has fallen to its lowest level since 1953, with outputs of new cars and vans in the first half of the year plunging 11.3% year-on-year. Passenger car outputs are down 7.3% to 385,800 units, while commercial vehicle manufacturing has sunk 45% due to Stellantis' decision to shutter its Vauxhall Luton factory [1]. The decline is attributed to uncertainty over export tariffs, Jaguar's cessation of car production, and Mini's shift to China.

The Society of Motor Manufacturers and Traders (SMMT) reported that a total of 417,232 new vehicles were built in the UK in the first six months of 2025. Car production fell by 7.3%, while commercial vehicle production was down by 45.4% [1]. The latter was significantly affected by Stellantis' decision to close its Vauxhall plant in Luton [2].

Mike Hawes, SMMT chief executive, stated that "Global economic uncertainty and trade protectionism have taken their toll on automotive production across the globe, with the UK no exception. The figures are not, therefore, unexpected but remain very disappointing. However, there are foundations for a return to growth" [1]. Despite three straight months of declining export volumes culminating in an 18.7% drop in June, the US maintained its position as the UK’s biggest single export market, underscoring the importance of the UK-US trade deal [1].

The new US tariff agreement, which entered into force on June 30, has had a small positive impact on the June production numbers, according to SMMT. However, the continuous recovery will require long-term stability and greater political clarity, especially about EV policy [2]. The acceleration of electric transmission worldwide has prompted the UK to attract new investments in batteries production, gigafactories, and local assembly [2].

The government's 2035 goal of 1.3 million cars per year is an ambitious target from the current production levels. Mike Hawes, SMMT chief executive, noted that "we clearly require at least one, if not two, new entrants to come into UK production" to hit the target [2]. The industry hopes that the first half of 2025 marks the nadir for the UK auto industry, with recent advances such as the US-UK tariff deal potentially boosting confidence [1].

References:
[1] https://www.fleetnews.co.uk/news/uk-vehicle-production-remains-in-decline
[2] https://investorempires.com/uk-vehicle-production-slumps-to-lowest-level-since-1953-amid-tariff-uncertainty-and-ev-grant-confusion/