UK Car Production Crashes to 75-Year Low: What’s Behind the Crisis?

UK Automotive Industry Hits Post-War Crisis Low
New data from the Society of Motor Manufacturers and Traders (SMMT) reveals UK car production plummeted 32.8% in May 2025, sinking to just 49,810 units—the lowest May output since 1949 (excluding pandemic-affected 2020).

Key Findings from the SMMT Report
📉 Total vehicle production (May 2025): 49,810 (-32.8% YoY)
🚗 Car production: 47,723 (-31.5%)
🚛 Commercial vehicles: 2,087 (-53.6%)
🌍 Exports share: 78.5% (now dangerously high)

What Caused This Collapse?
1. US Trade War & Tariffs Hammer UK Exports
Trump’s 25% tariffs on UK-made cars (March 2025) led to a 55.4% export drop in May.

Luxury brands hit hardest:

Jaguar Land Rover (UK’s biggest auto exporter) halted US shipments

Aston Martin slashed exports

Partial relief: US just dropped “revenge tax” (Section 899), easing pressure on UK firms.

2. Falling EU & Global Demand
🇪🇺 EU exports: -22.5% (still UK’s largest market)
🇨🇳 China exports: -11.5%
🇹🇷 Turkey exports: -51%

3. Domestic Market Weakness
UK buyers pulled back (-42.1% production for home market)

Reasons:

Economic uncertainty

High interest rates

EV transition disruptions (factories retooling)

4. Commercial Vehicle Catastrophe
Stellantis Luton factory closure (March 2025) wiped out 1,200 jobs

Van exports to EU: -72.1%

Is There Hope for Recovery?
✅ New UK-US Trade Deal (10% Tariffs)
Covers 100,000 UK vehicles/year (vs. 25% before)

Aston Martin has resumed US shipments

✅ £2.5bn UK Automotive Rescue Package
Industrial Strategy tackles high energy costs

R&D funding boost for EV transition

⚠️ Long-Term Challenges Remain
Brexit trade frictions still hurting EU exports

Global EV race pressures traditional automakers