Finance
UK auto production to drop 15% in 2025, recovery expected in 2026, SMMT data shows
Published by Global Banking and Finance Review
Posted on July 24, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 24, 2025
2 min readLast updated: January 22, 2026
UK auto production to fall 15% in 2025 due to trade issues, with a recovery in 2026. Electrified vehicle output hits record levels.
(Reuters) -Britain's new vehicle production is expected to decline by 15% in 2025, weighed down by global trade disruption; however, a reversal is expected the next year, industry data showed on Thursday.
While global automakers continue to feel the impact of U.S. President Donald Trump's tariffs, the UK is set to benefit from a new trade deal that slashed taxes on British car exports.
UK new vehicle production is expected to reach 755,000 units this year, data from the Society of Motor Manufacturers and Traders showed, lower than last year. However, the sector is expected to recover in 2026 with a 6.4% growth, pushing numbers back above 800,000 units.
"There are foundations for a return to growth," said SMMT CEO Mike Hawes, after calling half-yearly output figures "disappointing".
Car and commercial vehicle manufacturing fell nearly 12% to 417,232 units in the first six months of the year. However, June output rose 6.6% in the month, breaking its five-month downward trend, to 66,317 units.
However, electrified car production rose by 1.8% to 160,107 units – a record share of output for the first half of the year.
(Reporting by Yamini Kalia in Bengaluru; Editing by Vijay Kishore)
UK auto production refers to the manufacturing of vehicles in the United Kingdom, which includes cars, trucks, and other motor vehicles.
Electrified vehicles are vehicles that use electric power for propulsion, including fully electric vehicles (EVs) and hybrids that combine electric and traditional fuel sources.
Tariffs can increase the cost of imported materials and components, potentially leading to higher production costs and reduced output in the automotive sector.
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