SMMT Forecasts UK Car Output to Fall 15% in 2025, With Recovery Next Year
The UK’s car manufacturing sector is on track for its worst year since the early 1950s, according to the latest forecast from the Society of Motor Manufacturers and Traders (SMMT). Total output is expected to shrink by 15% in 2025, dropping to just over 755,000 units—down from 889,000 in 2024.
The first half of the year saw a 11.8% decline in output, driven largely by export slowdowns, tariff uncertainty, and weak demand across key markets. Domestic output also fell 8.1% year-on-year, exacerbated by paused production at several plants awaiting supply chain fixes or updated model tooling.
Despite the decline, the SMMT report points to one small bright spot: production of electrified vehicles—including battery-electric, plug-in hybrid, and full hybrid—grew by 1.8%, reaching a record 160,100 units. These now represent more than 41% of total UK output, highlighting a structural shift even as headline figures continue to fall.
SMMT Chief Executive Mike Hawes described the figures as “disappointing but not surprising,” noting that the industry has been operating under “extremely challenging trade conditions.”
“There is a recovery on the horizon,” Hawes added. “Provided we can secure consistent access to export markets and maintain domestic demand incentives, we could see volumes rise again next year.”
Indeed, the report forecasts a 6.4% uptick in 2026 output, potentially bringing production back above 800,000 units. That would still fall short of pre-pandemic highs, but marks a possible turning point after years of decline.
The broader message is clear: UK carmakers are resilient but facing unprecedented headwinds. Tariffs, component shortages, energy costs, and global competition from Chinese EV manufacturers all play a role.
Unless deeper trade agreements are secured—particularly with the US and EU—the UK may continue to slip behind its European neighbours in terms of total automotive volume.
But the growing share of EV production suggests a changing dynamic. British plants are becoming critical hubs for new-model electrification—offering some hope that, even with lower volumes, the UK can remain a serious player in the global car industry.