Published : 2 weeks ago, on 28/11/2024

(Reuters) – British car production experienced its eighth consecutive month of decline in October, as factories continued efforts to retool for making the next generation of zero-emission vehicles, according to industry data released on Thursday.

A total of 77,484 new cars rolled off production lines, down 15.3% from last year, the Society of Motor Manufacturers and Traders (SMMT) said.

Production of electrified vehicles, which include fully electric models, plug-in hybrids and full hybrids, totalled 24,719 units. This marks a 32.6% decrease from the previous year and represents 31.9% of the total production output.

On Tuesday, the SMMT warned that carmakers will have to pay out nearly 6 billion pounds ($7.52 billion) in discounts and compliance costs to meet Britain’s 2024 EV sales mandate, which requires at least 22% of an automaker’s new car sales to be purely electric vehicles in 2024.

UK Finance Minister Rachel Reeves said on Wednesday Britain has launched a consultation to review the targets after warnings from industry bodies.

Automakers such as Volkswagen, Ford, Nissan and GM are cutting jobs in response to softening demand for EVs, which consumers see as too expensive, amid increasing Chinese competition.

The challenging UK sales environment is under scrutiny as U.S. President-elect Donald Trump’s proposed tariffs on Mexican imports to the U.S. could harm European carmakers such as Volkswagen and Stellantis more than direct EU tariffs, experts say.

UK car production is down 10.8% at 670,346 units to date this year, primarily due to a decline in exports, SMMT said.

($1 = 0.7980 pounds)

(Reporting by Aby Jose Koilparambil and Shanima A in Bengaluru; Additional reporting by Aatrayee Chatterjee; Editing by Mohammed Safi Shamsi)