Vehicle production plummets as UK car brands face 'toughest year in a generation'

The Society of Motor Manufacturers and Traders identified that this included 717,371 cars and 47,344 commercial vehicles, with output falling eight per cent and 62.3 per cent respectively.

It highlighted that this was down to the Jaguar Land Rover hack, new tariffs on vehicles heading to the United States and the consolidation of two commercial vehicle plants into one.

Almost eight in 10 vehicles manufactured in the UK are exported abroad, with the European Union remaining the UK's largest partner with 56.7 per cent of exports.

The United States (15 per cent), China (6.3 per cent), Turkey (5.3 per cent) and Japan (2.9 per cent) round out the top destinations for imported UK vehicles.

The UK has struggled to boost its manufacturing industry following the coronavirus pandemic, with car output falling since then.

In December 2019, the UK saw around 1.3 million vehicles produced, and despite small spikes in mid-2021 and early 2024, the sector continues to struggle.

Mike Hawes, chief executive of the SMMT, described 2025 as the "toughest year in a generation" for the UK vehicle manufacturing industry.

He said: "Structural changes, new trade barriers, and a cyber attack that stopped production at one of the UK’s most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery.

"The launch of a raft of new, increasingly electric, models and an improving economic outlook in key markets augur well."

Production of battery electric, plug-in hybrid and hybrid cars jumped by 8.3 per cent to almost 300,000 units.

This marked an impressive 41.7 per cent of the total market share, with volumes expected to grow massively in 2026 as production at Nissan's Sunderland plant ramps up.

Nissan confirmed in mid-December that the next-generation Leaf had gone into production at the Sunderland plant as part of a huge £450million investment.

The SMMT forecasts that the car production sector in the UK will grow by more than 10 per cent to around 790,000 units over the next 12 months.

There is even potential for the UK to see the production of one million vehicles by 2027, provided that new model launches stay on track.

The SMMT also noted that further benefits could be seen from new trade deals with South Korea and India, which could see trade volumes increase dramatically.

Mr Hawes added: "The key to long-term growth, however, is the creation of the right competitive conditions for investment; reduced energy costs; the avoidance of new trade barriers; and a healthy, sustainable domestic market.

"Government has set out how it will back the sector with its Industrial and Trade strategies, and 2026 must be a year of delivery."