Labour urged to make deal with EU to protect £70billion car industry ahead of new Brexit rules

Felix Reeves
Thu, 30 Apr 2026 12:36:27 +0000

The UK car industry could "suffer" if it does not secure a fresh agreement with the European Union in the coming months, as vehicle production across the country falls.

New data shows that UK vehicle production fell by 8.2 per cent in March compared to last year, with just 72,511 models rolling off factory lines.

In total, 69,755 cars (down 0.8 per cent YoY) and 2,756 commercial vehicles (down 68.3 per cent YoY) were produced, according to the Society of Motor Manufacturers and Traders (SMMT).

It noted that production was affected by a part supply challenge, which temporarily paused production at one of the country's largest plants.

TRENDING

Stories

Videos

Your Say

Other factors included weak exports to markets in Asia and the United States, model changeovers, and a commercial vehicle company restructuring last year.

Exports of vehicles fell by 7.4 per cent year-on-year, while cars and commercial vehicles staying in the UK (21,570) fell by just over 10 per cent.

Mike Hawes, chief executive of the SMMT, said: "Car production stabilising in March is welcome news for both assembly and the wider supply chain.

"[The] Government's recent intervention to bring down electricity costs will provide a major and long-called-for boost, but the scheme's benefits must be delivered urgently as the geopolitical situation offers little optimism."

Mr Hawes called on the Government to ensure the UK is not excluded from the European Union's "Made in Europe" proposals.

The regulations have been designed to protect European companies and boost competition amid a growing threat of Chinese interference across the market.

Measures included in the Industrial Accelerator Act are designed to help businesses create jobs, with a specific focus on strategic sectors including steel and cars.

At present, the UK would not be included in the scheme as it is not an EU member state, nor is it considered a "trusted partner".

LATEST DEVELOPMENTS

Driving law changes launching in May will see DVSA rule updates, new HMRC rates and more

M6 closed: Drivers face long delays after motorway crash as emergency services rush to scene

Driving licence changes could see legal motoring age cut as support grows for younger learners

The SMMT has continually called for the UK to be included in the "Made in Europe" regulations to preserve the €80billion (£69.3billion) trade alliance.

Around 70 per cent of automotive products imported to the UK come from the bloc, which is worth around €60billion (£52billion) to the EU.

Mr Hawes continued, saying: "We must ensure any 'Made in Europe' proposals from the European Commission do not exclude the UK, as the two industries are integrated such that both would suffer if the free trade provisions enshrined in the Brexit deal were undermined.

"The EU and UK must work together to avoid that scenario - and the looming threat of tariffs arising from stricter rules of origin on electrified vehicles - to ensure a positive outcome for industry, economies and consumers on both sides of the Channel."

The UK's automotive trade organisation said adding the UK to the list of "trusted partners" would "protect a long-established, mutually beneficial trading relationship".

It also warned of further trade issues next year when new Rules of Origin restrictions are introduced as part of the Brexit Trade Cooperation Agreement.

Industry leaders have demanded that Labour speak with its European counterparts to look at "pragmatic solutions" to avoid any knock-on effects to the sector.

The SMMT said the upcoming EU-UK summit will be a crucial time to discuss automotive issues, stressing the importance of "mutual benefits".