The Society of Motor Manufacturers and Traders (SMMT) reported a sharp fall in UK vehicle production at the start of the year, with total production falling by 13.6 percent in January, as weaker export demand weighed heavily on the sector.
A total of 67,415 vehicles left British factories during the month, including 65,249 passenger cars and 2,166 commercial vehicles. Passenger car production fell 8.2 percent compared to January 2025, while commercial vehicle production fell 68.6 percent year-on-year.
The decline was primarily due to lower foreign demand. Although domestic demand for British-made cars remained broadly stable, export volumes fell, particularly to markets outside Europe. The majority of UK vehicle production is typically exported, leaving manufacturers exposed to fluctuations in global demand and trading conditions.
The United States remained the second largest destination after the European Union for British-made cars, accounting for 14.1 percent of exports. Japan followed with a share of 2.7 percent, while China and Turkey reached 2.5 percent and 2.4 percent, respectively.
The production of electrified vehicles also fell. Production of battery electric vehicles (BEVs), plug-in hybrids and hybrid models fell 10.6 percent to 26,854 units, accounting for 41.2 percent of total passenger car production. Despite the decline, electrified vehicles continue to make up a significant proportion of UK production as manufacturers move to zero-emission platforms.
The industry association said the weak start to the year reflected subdued global demand and underlined the importance of stable trading relationships. Protectionist measures and “made in Europe” proposals in some markets were cited as additional headwinds.
SMMT chief executive Mike Hawes called the January figures disappointing but pointed to an expected recovery later in the year as new electric models enter production.
“Weak exports to markets outside Europe coupled with weak demand made for a disappointing start to the year for British vehicle manufacturing,” he said. “It reinforces the need for a forward-looking trade agenda that secures existing preferential access and builds new ones with markets worldwide.”
The SMMT expects total automobile production to increase by more than 10 percent in 2026 to around 790,000 units, with the potential to reach one million vehicles by 2027, assuming new model launches go according to plan and investment conditions remain favourable.
The outlook depends on competitive energy costs, a strong domestic market and targeted supply chain support, the trade association said, as the sector continues its capital-intensive shift towards electrification.
