UK car production jumped by 21 per cent in January as demand for British-built brands continues to grow globally, but experts say more needs to be done to support manufacturers in the upcoming Budget.
In January 83,997 car units were produced compared with 68,575 last year. The majority (75 per cent) of manufactured vehicles were for overseas shipment to Europe, China, the US and Japan.
Production of battery electric vehicles, plug-in hybrid and hybrid vehicles made in the UK, rose by 4.5 per cent to 29,590 units in January.
Looking at the domestic market, production was up 64 per cent with an additional 7,863 units made for UK customers bringing the total to 20,059 for the beginning of the year.
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UK car production rose by 21 per cent in January
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The EU is still the largest global market for British-built cars, taking more than half (53.2 per cent) of exports, followed by the US (15 per cent), China (10.5 per cent), Japan (2.8 per cent) and Australia (2.3 per cent).
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), which conducted the research, said: “A positive start to the year for UK car production bodes well for the industry and the many thousands of livelihoods on which it depends.
“There can be no room for complacency, however, given economic headwinds and geopolitical tensions. There must be a relentless commitment to competitiveness, building on the significant recent investments into the sector.
“The forthcoming Budget is a chance for Government to do just that by introducing measures to boost UK automotive manufacturing, focused on energy, investment competitiveness and market demand.”
Commenting on the figures, John Rawlings, consumer editor at Carwow, expressed how the new data is encouraging for British car manufacturers.
Rawlings also explained how the growth could be even better if the right incentives are introduced in the upcoming Spring Budget.
He noted: “There’s lots of interesting and positive news in the SMMT UK car manufacturing figures for January, not least that over 14,000 extra cars were produced compared to January 2023.
“Over half of those were built for the UK market, but also electrified vehicles of all types represented 35.7 per cent of total UK car production, up 4.5 per cent.”
Lisa Watson, director of sales at Close Brothers Motor Finance, remarked how while another increase in UK car manufacturing will provide further optimism for the year ahead, more clarity is needed.
The Government's zero emission vehicle mandate, which requires 22 per cent of new cars manufactured this year to be electric, may cause headaches for manufacturers.
She said that the Government’s £2billion pledge to the UK automotive manufacturing industry at the back end of 2023 was a step in the right direction, but manufacturers will be keeping a close eye on the Budget statement.
More needs to be done to accelerate infrastructure development, Watson stated, such as installing charging points, if the UK is able to support widespread adoption of electric vehicles.
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The EU is still the largest global market for British-built cars
PA
Watson added: “This is currently acting as a barrier to EV adoption for consumers, who are still hesitant about making the switch. While 28 per cent of those looking to purchase a car this year plan to buy a hybrid, according to our recent research, only 12 per cent plan on buying an EV - down from 14 per cent last year.”