Car production saw a massive drop last year as the sector faced difficulties in keeping up with Government targets and a lack of consumer appetite for electric vehicles.
In total, car production last year was nearly 12 per cent lower than in 2023 with only 779,584 cars and 125,649 commercial vehicles produced.
The data from the Society of Motor Manufacturers and Traders (SMMT) warned that December was the tenth consecutive month of car decline with last yearseeing car production fall by 13.9 per cent while exports declined by 15.5 per cent to 603,565 units.
There was also a 20 per cent decline in battery electric, plug-in hybrid and hybrid vehicle output, which the SMMT said was expected for the time.
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Elective vehicles output saw a 20 per cent decline last year
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Mike Hawes, SMMT Chief Executive, said: “Amid significant geopolitical and trade tensions, UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world.
“Growing pains are inevitable, so the drop in volumes last year is not surprising. With new, exciting models and battery production on the horizon, the potential for growth is clear.
“Securing this future, however, requires industrial and trade strategies that deliver the competitive conditions essential for growth amidst an increasingly protectionist global environment.”
Meanwhile, nearly eight-in-10 cars produced were exported last year with 603,565 units shipped globally. The EU took the most (54 per cent) followed by the United States (16.9 per cent) and China (6.6 per cent).
Despite global appetite, exports to the EU and China were down 24.3 per cent and 21.8 per cent respectively, although demand in the US rose 38.5 per cent. Last year, car companies announced £3.5billion worth of investments into electric vehicles which caused production to take a hit, although the SMMT estimate the decline to be temporary.
The organisation said it expects UK car and light van production to hit around 839,000 units this year before rising to 930,000 units in 2027 and potentially going above one million units in 2028, and hitting 1.1 million by 2030.
The SMMT noted: “This is, however, dependent on global car and van market demand improving, positive economic conditions and greater consumer confidence, and the delivery of the competitive conditions necessary to ensure zero emission model launches stay on track.
“Realising this ambition and unlocking future growth will require an industrial strategy with advanced automotive manufacturing at its heart, enabling innovation, attracting investment and supporting the country’s highly skilled workforce.”
To help push the production of EVs, Hawes called for more incentives for consumers to buy EVs and the introduction of a tariff-free trade partnership with the EU to help continue the exportation of vehicles without barriers to the UK’s largest market.
The push for more electric vehicles follows the Zero Emission Vehicle mandate by the Government which requires all new car sales to be electric by 2035 with at least 28 per cent electric this year.
Alastair Campbell from Marketcheck UK warned that the “significant downturn” in the UK’s car market is “deeply concerning”.
He said: “Factors contributing to this downturn may stem from the broader impact of the Autumn Budget – the implications of these changes have rippled through the economy, impacting consumer confidence and spending power.”
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The SMMT estimates UK car and light van production to hit around 839,000 units this year
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Hawes added that having the “right strategies” in place will help secure the sector’s position as a £100billion global trade hub, with the “potential to deliver £50billion in UK growth over the coming decade, supporting Government’s economic, societal and environmental ambitions”.
