UK car production down a fifth as makers switch to electric

Car production in the UK fell by 20.6 per cent in September year-on-year as export volumes continue to decline.
Output for domestic and export markets saw almost identical falls in production compared with a particularly strong September last year, the best month since 2020.
Output for domestic markets fell by 20.8 per cent to 18,614 units while exports fell by 20.6 per cent to 51,425 units, according to data from the Society of Motor Manufacturers and Traders, the main voice of Britain’s automotive sector.
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However, in the year to date, production for the UK market has risen 6.5 per cent year-on-year while exports have dropped by 14.4 per cent, meaning overall UK car production has fallen by 10.2 per cent to 592,862 units.
The share of cars produced in the UK destined for overseas markets in the year to date has also fallen from 79.6 per cent in 2023 to 75.8 per cent.
Overseas shipments to China fell by 23.1 per cent to 3,673 in September as the country’s economic slowdown has continued to deepen. Gross domestic product in China rose by 4.6 per cent year-on-year in the three months to September, lower than the previous quarter and below the government’s own 5 per cent target.
However, in recent weeks, Beijing has announced a number of measures aimed at supporting growth in the world’s second largest economy.
Despite the slowdown in car production this year, the sector remains Britain’s largest exporter of manufactured products, increasing its share of these exports to 13.9 per cent in the first half of 2024.
Mike Hawes, chief executive of the SMMT, said that the “short-term” production declines were anticipated but added that the car industry still needs the “necessary industrial and market conditions” to stimulate growth.
“The forthcoming budget and industrial strategy must put in place ambitious measures to bolster business confidence, attract investment and secure competitiveness,” Hawes said.
Exports to the EU also fell in September, with volumes dropping by 28.6 per cent to 26,825 units — although this still accounted for more than half of the share of total exports by the British car industry.
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Separate data from the European Automobile Manufacturers’ Association found that car sales in the EU fell by 18.3 per cent in August to their lowest in three years thanks to double-digit losses in major markets such as Germany, France and Italy.
The number of shipments to the US rose in September, however, up by 24.6 per cent year-on-year to 8,210 units. Exports to the market accounted for 16 per cent of total shipments from UK car manufacturers in September.
The auto industry body attributed the fall in September to companies retooling their factories to focus on producing all-new zero-emission vehicles. Almost a third of cars made in September were battery electric, plug-in hybrid or hybrid models.