UK car and commercial vehicle production down in January

The UK’s automotive trade body is blaming a “perfect storm” for a decline in car and commercial vehicle production.

New figures from the Society of Motor Manufacturers and Traders (SMMT) show that UK factories produced 17.7% fewer vehicles in January, compared to the start of last year.

Some 71,104 were produced in the month, which was a 14.3% year-on-year decline, while CV production was hit harder, down 41.5%, with 6,908 CVs built. 

The performance follows a bumper January last year, when car and CV output surged by 21% and 27.5% respectively, and reflects weakness in key markets, notably the EU, China and the UK, combined with planned model changeovers.

UK production of battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) vehicles increased 1.5% to 30,028 units, accounting for 42.2% of all cars made in January, the highest monthly performance since December 2022 (47.2%). 

The lion’s share of overall car production (80.4%) was for export, although volumes slipped -9.2% to 57,140 units. Production for the UK market, meanwhile, fell 30.4% to 13,964 units.

The EU, the largest global market for British-built cars, took more than half (52.0%) of car exports, followed by the US (18.6%), China (6.2%), Turkey (3.5%) and Japan (3.4%). 

While shipments to the EU and China fell by 11.2% and 46.3%, those to the US, Turkey and Japan all rose, up 12.4%, 36.9% and 8.1%, respectively.

Export demand also continued to drive CV production, accounting for 61.7% of UK van, truck, taxi, bus and coach production. 4,259 units were shipped overseas, a year-on-year decline of 46.6% with 97.1% destined for the EU. 

Volumes for the UK market also fell, down by 31.1% to 2,649 units. 

The SMMT says that the performance must be set in context, however, with a particularly strong January last year – which saw the best CV output since 2008 – compounding the decline.

The news comes amid plant restructuring and slower than anticipated rollout of new models as manufacturers respond to softening demand in the UK and other key markets. 

Given the significant investments at stake, the industry is urging Government to ensure the needs of the UK automotive sector are at the core of its forthcoming industrial and trade strategies.

These strategies must be combined with measures to ensure a healthy domestic market, especially for EVs – a key investment consideration – and quick release of the £2 billion promised by Government to boost the sector via the Automotive Transformation Fund, says the SMMT. 

Mike Hawes, SMMT chief executive, said: “UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected. 

“The sector is doing all it can to keep production plans on track but needs Government to ensure automotive is at the heart of its forthcoming industrial and trade strategies with promised funding invested as soon as possible. 

“Doing so will help ensure our competitiveness and safeguard the billions of pounds of investment, jobs and economic growth which is now at stake.”