UK car production tumbles 15pc in October

UK car manufacturing output declined 15.3% in October, with just 77,484 vehicles produced, marking the eighth consecutive month of contraction, according to data released on Thursday by the Society of Motor Manufacturers and Traders (SMMT).

Production for domestic sales fell 4.7%, while exports dropped 17.6%, with the EU - accounting for over half of export volumes - seeing a sharp 34.6% decline.

Despite that, exports to the US surged 96.2%, driven by strong demand for luxury and premium UK-made models.

The shift toward electrified vehicles also saw setbacks.

While nearly a third of October’s output comprised battery electric, plug-in hybrid, and hybrid models, production of the vehicles fell by 32.6%.

Since January, 239,773 electrified units have been produced, with 72% exported.

Year-to-date figures showed a 10.8% decline in overall production, with exports down 14.8%, offsetting a modest 5.3% rise in domestic output.

The cumulative export drop equated to nearly 90,000 fewer cars shipped abroad compared to 2022.

The SMMT said there were broader market challenges, including subdued EV demand and unsustainable operational costs, hampering the UK's transition to net-zero manufacturing.

Despite over £20bn of investment in EV production in recent years, the latest forecasts predicted UK car and light van production would fall short of pre-pandemic levels, with output for 2025 expected to reach just 839,000 units - far below the 1.4 million vehicles produced in 2019.

The industry body said the sector was facing further risks if weak consumer demand persisted and plants failed to meet planned production schedules for zero-emission vehicles.

Under a worst-case scenario, it said annual output could fall below 750,000 units by the end of the decade, threatening jobs and economic growth.

The SMMT called for urgent government action to enhance the UK’s competitiveness in advanced vehicle manufacturing.

Its recommendations included addressing high energy costs, implementing market regulations supportive of industry growth, and securing trade agreements to ensure fair access to global markets.

“These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure,” said SMMT chief executive officer Mike Hawes.

“Slowdowns in the global market - especially for EVs - are impacting production output, with the situation in the UK particularly acute given we have arguably the toughest targets and most accelerated timeline but without the consumer incentives necessary to drive demand.”

Hawes said the cost of stimulating that demand and complying with those targets was “huge” and unsustainable.

“Urgent action is therefore needed and we will work with government on its rapid review of the regulation and the development of an ambitious and comprehensive Industrial Strategy to assure our competitiveness.”

Reporting by Josh White for Sharecast.com.