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UK Vehicle Manufacturing Faces Historic Low in May

The UK automotive sector just recorded its weakest May for vehicle production since 1949 — excluding the Covid-19 lockdown year of 2020 — as manufacturers grapple with a mix of export barriers, model restructuring, and policy shocks.

According to fresh data from the Society of Motor Manufacturers and Traders (SMMT), new car and commercial vehicle production fell by 32.8% year-over-year to just 49,810 units in May 2025. That sharp drop marks the fifth consecutive monthly decline in output and underscores how international trade dynamics and internal disruptions are weighing on Britain’s auto industry.

Tariffs and Restructuring Drive the Decline

SMMT attributed the steep fall in production to a combination of model changeovers, factory restructuring, and trade-related disruptions — most notably the U.S. tariff hike imposed by former President Donald Trump in April.

Under the executive order, a 25% tariff was slapped on all car and car part imports into the United States. The move hit UK manufacturers especially hard, leading luxury brands like Jaguar Land Rover and Aston Martin to pause shipments to the U.S. market — traditionally one of their most profitable destinations.

Though Trump later eased the levy for U.S.-based firms, capping tariffs at 10% for the first 100,000 imported vehicles annually, the initial impact was already significant.

Export Collapse Hits Key Markets

The production slump was compounded by a dramatic fall in exports to the UK’s two biggest markets:

• Shipments to the European Union fell by 22.5%
• Exports to the United States plunged by 55.4%

Together, the EU and U.S. account for a majority of the UK’s auto exports. In 2024, for example, the UK exported £9 billion ($12.36 billion) worth of cars to the U.S. alone — more than 27% of all UK car exports.

Long-Term Production Slips Toward Historic Lows

The cumulative data for the first five months of 2025 paint a bleak picture. Year-to-date vehicle production has declined 12.9% from 2024, totaling 348,226 units — the lowest cumulative production level since 1953, SMMT reported.

The continued downturn threatens jobs, investment, and the UK's broader export economy, where the automotive sector has long served as a pillar of industrial strength.

A Glimmer of Hope Amid Industry Struggles

Despite the tough numbers, SMMT Chief Executive Mike Hawes remains cautiously optimistic. In a statement, he pointed to recent progress in trade diplomacy, including revised deals with the U.S. and improved EU relations, as reasons for potential stabilization in the months ahead.

“While 2025 has proved to be an incredibly challenging year for UK automotive production, there are the beginnings of some optimism for the future,” Hawes said. “Government strategies that recognize the critical role this sector plays in driving economic growth are essential to help recovery take root.”

Prime Minister Keir Starmer also emphasized the long-term benefits of tariff adjustments, noting that the reduced U.S. duties could save hundreds of millions of pounds per year for firms like Jaguar Land Rover.

Looking Ahead

As the UK auto sector contends with global market shifts and geopolitical uncertainty, its ability to recover will likely hinge on sustained export demand, a supportive policy environment, and the successful rollout of next-generation vehicle models.

But for now, the data is clear: Britain’s car factories are producing at rates not seen since the post-WWII era — a stark reminder of how international politics, especially tariff-based trade barriers, can derail even the most established industrial engines.