UK Car Manufacturing Hits 76-Year Low Amid Tariff-Fueled Chaos

Strategic Insights -

The UK's car manufacturing industry slumped to its lowest level since 1949 in May, with production plummeting 32.8pc to 49,810 vehicles, according to the Society of Motor Manufacturers and Traders (SMMT). This decline, which marks the worst output since the coronavirus pandemic in 2020 forced factories to close, highlights an ongoing slowdown in the sector. As a result, Britain has produced 348,226 vehicles so far this year, down 12.9pc from 2024. Exports also took a hit, with a 27.8pc drop in shipments to the US following Donald Trump's tariff announcement. The crisis led Jaguar Land Rover and Aston Martin, two of Britain's largest carmakers, to temporarily halt shipments to the US. Although the US has since dropped tariffs on UK vehicles to 10pc for the first 100,000 exported, the SMMT is cautiously optimistic that the dramatic fall in exports will be "short-lived".

Key Takeaways:

  • The UK's car manufacturing industry suffered its lowest output since 1949 in May, with 49,810 vehicles produced, a 32.8pc drop.
  • The decline marks the worst output since the coronavirus pandemic in 2020, excluding the factory closures.
  • Britain has produced 348,226 vehicles so far this year, down 12.9pc from 2024.
  • Exports fell by 27.8pc, with shipments to the US dropping by more than half due to tariff concerns.
  • Jaguar Land Rover and Aston Martin halted shipments to the US before resuming them after the US dropped tariffs to 10pc.
  • The SMMT believes the dramatic fall in exports will be "short-lived" following the US' tariff reversal.
  • Chery, a Chinese electric carmaker considering launching a UK plant, may further disrupt the sales of legacy Western manufacturers.
  • New Chinese car brands continue to flood the UK market with cheaper models, threatening the sales of Western manufacturers.

Statistics:

  • UK car manufacturing output fell to 49,810 in May, a 32.8pc drop.
  • The decline marks the worst output since 1949, excluding the coronavirus pandemic in 2020.
  • Britain has produced 348,226 vehicles so far this year, down 12.9pc from 2024.
  • US export shipments fell by 27.8pc due to tariff concerns.
  • Shipments to the US dropped by more than half following Donald Trump's tariff announcement.
  • The value of UK car exports to the US was approximately £9bn last year.

Sources:

  • Society of Motor Manufacturers and Traders (SMMT)
  • Mike Hawes, chief executive of the SMMT
  • Chery, a Chinese electric carmaker
  • Donald Trump, US President (tariff announcement)
  • Jaguar Land Rover and Aston Martin (export halts)