Vehicle production down in January amid weak global markets

SMMT: Vehicle production declines -13.6% in January, with 67,415 cars and commercial vehicles leaving factories

UK vehicle production fell -13.6% in January, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT). 

Factories produced 67,415 vehicles, comprising 65,249 cars and 2,166 commercial vehicles (CVs), the former declining by -8.2% compared with January last year, while CV output fell for the 10th consecutive month, down -68.6% following a major plant restructuring.

The loss was driven by a decline in exports across both cars and CVs, with shipments down -10.1% and -75.0% respectively, amid weak demand in key global markets. Production for overseas buyers still accounted for the majority (77.8%) of vehicle output, with the EU remaining the largest global market for UK plants, taking 62.5% of car exports and 94.0% of CV shipments.

The US remained the second largest importer of UK-built cars with a 14.1% share, followed by Japan (2.7%), China (2.5%) and Turkey (2.4%). While car exports to the EU rose 7.8%, reinforcing the need for free and fair trade and market access across the Channel, shipments to all other top five markets fell by double digits.

CV production for the UK also fell steeply, by -58.4%, whereas car output for the domestic market was broadly flat, down -0.6% to 13,880 units with just 84 fewer vehicles turned out. Production of battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars, meanwhile, fell -10.6% to 26,854 units, although they still accounted for 41.2% of car output.

The SMMT says that volumes look set to increase this year as next-generation EV production ramps up in Sunderland and with a further seven new EV models planned for roll-out across the UK this year. 

The latest independent outlook now expects overall car production to rise by more than 10% to some 790,000 units in 2026, says the SMMY. Combined car and light CV production is anticipated to reach 824,000 units – with the potential to reach one million by 2027, provided new model launches are on time and the right economic conditions for investment exist. 

Stability in global trading conditions, notably with the EU and US, and the delivery of measures outlined in government’s Industrial and Trade Strategies, remain critical to maintaining competitiveness and unlocking future growth, says the SMMT.

Mike Hawes, SMMT chief executive, said: “Weak exports to markets beyond Europe amid soft demand delivered a disappointing start to the year for UK vehicle manufacturing. It reinforces the need for a forward-looking trade agenda that secures existing preferential access – notably with the biggest market on our doorstep given protectionist ‘Made in Europe’ proposals – and builds new ones with markets worldwide. That must be combined with more competitive conditions for UK manufacturing – lower energy costs, a strong and sustainable domestic market, and specific support for our supply chain.”