According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), UK car production saw a significant reduction of 20.6% in September, with only 70,039 units produced. This drop is partly due to the comparison with a strong performance in September 2023, which recorded the highest output for that month since 2020.
This decline was anticipated as factories shift away from producing current models to prepare for the launch of all-new zero-emission vehicles. In September, 21,309 electrified vehicles1 were manufactured, accounting for 30.4% of total car production, though this represents a 37.0% decrease compared to the same month last year.
Domestic and export production experienced nearly equal declines: domestic output fell 20.8% to 18,614 units, while export production decreased by 20.6% to 51,425 units. The EU remains the largest market for UK-made vehicles, importing 26,825 units, which is 52.2% of total exports, although this figure is down 28.6%. Meanwhile, exports to China, one of the top three destinations, dropped by 23.1% to 3,673 units, representing a 7.1% share. Conversely, exports to the US increased by 24.6% to 8,210 units, accounting for 16.0% of September’s total exports.
Year-to-date figures show a 6.5% increase in UK production; however, this was unable to counter a 14.4% decline in overseas shipments. This led to an overall production drop of 10.2% to 592,862 units since January. Projections indicate that growth is set to return as new models are introduced, with car and light van production expected to exceed one million units by 2027 and potentially surpass 1.3 million by 2030.2
Despite the downturn in production this year, SMMT’s recent trade data analysis reveals that the automotive sector remains the largest exporter of manufactured goods in the UK, increasing its share of total exports to 13.9% in the first half of 2024.3 The value of these exports has remained robust, fueled by global interest in premium UK-produced electrified vehicles, which hold approximately 1.5 times the value of internal combustion engine (ICE) models.4 Over the 12 months leading to June, the sector contributed £114 billion in total trade, which included £46.8 billion in exports and £67.2 billion in imports.5
Mike Hawes, SMMT Chief Executive, stated,
As the UK automotive sector undergoes its most significant transformation in over a century, the short-term declines in production were expected and are seen as a necessary adjustment for long-term growth. Following record investments announced last year, the sector is poised to solidify its position as the UK’s largest exporter of manufactured goods. To achieve this, we require optimal industrial and market conditions, and the upcoming Budget and Industrial Strategy must introduce ambitious initiatives to boost business confidence, attract investments, and ensure competitiveness.
SMMT urges that the upcoming Autumn Budget includes measures to encourage private consumer demand for battery electric vehicles, which would accelerate the market transition and stimulate industrial growth. Furthermore, it is crucial to reaffirm the funding secured through last year’s Advanced Manufacturing Plan, ensure access to competitively priced low-carbon energy, and implement strategies to encourage investment—particularly in the zero-emission powertrain supply chain and skill development.
Policymakers should collaborate with the industry to:
- Create an industrial strategy prioritizing the automotive sector
- Secure new investments in electrification and battery manufacturing to enhance EV trade with the EU and global markets
- Refine the upcoming trade strategy to align with domestic industrial goals
- Preserve automotive trade openness as a catalyst for future growth
- Improve the UK’s trading relationship with the EU, our closest trading partner
- Seek reductions in tariff and non-tariff trade barriers in key markets
- Lower customs-related operational costs
- Enhance the availability and transparency of trade data, particularly regarding the use of free trade agreements
SMMT data may be periodically revised as new information becomes available.
- Electrified vehicles include battery electric, plug-in hybrid, and hybrid models
- Independent production outlook for cars and light vans only– July 2024
- SMMT Trade Snapshot based on ONS / HMRC / SMMT data – produced October 2024
- Value comparison between electrified vehicles and internal combustion engines based on the rolling year, June 2024: EV: £17.2bn; ICE: £12.2bn
- SMMT Trade Snapshot based on ONS / HMRC / SMMT data – produced October 2024, based on 2023/2024 data
SOURCE: SMMT
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