New vehicle manufacturing in the UK declined by 11.9% year-on-year to 417,232 units in the first half of 2025, according to figures published on Wednesday by the Society of Motor Manufacturers and Traders (SMMT). The decline was partly offset by a modest rebound in car production in June, which rose 6.6% compared to a disrupted month in 2024.
The overall fall was driven by restructuring in commercial vehicle manufacturing, where output dropped 45.4% to 31,422 units. Year-to-date car production also dipped 7.3% to 385,810 units. Nonetheless, production of electrified cars – including hybrid, plug-in hybrid, and battery-electric vehicles – edged up 1.8% to 160,107 units, accounting for 41.5% of all cars built so far this year, a record share.
“Global economic uncertainty and trade protectionism have taken their toll on automotive production across the globe, with the UK no exception,” said SMMT Chief Executive Mike Hawes. “The figures are not, therefore, unexpected but remain very disappointing.”
Despite recent declines in export volumes, the UK remains a predominantly export-oriented car manufacturing base. Some 76.9% of all cars built were shipped overseas, with the EU remaining the top destination (54.4% share), followed by the US (15.9%), China (7.5%), Turkey (4.1%), and Japan (2.7%). Notably, US-bound exports fell by 18.7% in June, though the US retained its position as the UK’s single largest export market. A new UK-US trade agreement that came into force on June 30 is expected to support future growth by reducing tariffs on British automotive exports.
According to an independent outlook, total UK vehicle production in 2025 is forecast to decline by 15% to 755,000 units. However, the outlook sees a rebound in 2026, with an expected 6.4% increase to 803,000 units.
SMMT said a swift rollout of the UK’s new Industrial Strategy, including energy cost reductions, infrastructure improvements, and skills development, could help reverse the current decline. The government’s DRIVE35 strategy, alongside a £650 million Electric Car Grant programme, is intended to stimulate EV demand and attract industrial investment.
“There are foundations for a return to growth,” Hawes added. “Our engineering excellence, highly-skilled workforce and global reputation are strengths, and we have an Industrial Strategy with advanced manufacturing and automotive at its core. With rapid delivery and the right conditions, UK Automotive can reverse the current decline and deliver the jobs, economic growth and decarbonisation that Britain needs.”