Britain’s new vehicle production is forecast to decline by 15% in 2025, largely due to ongoing global trade disruptions, according to new data released Thursday by the Society of Motor
Manufacturers and Traders (SMMT). However, the industry is expected to bounce back in 2026.
Despite global automakers still grappling with the effects of trade policies, including tariffs imposed during Donald Trump's presidency, the UK is positioned to benefit from a recent trade agreement that cuts tariffs on British car exports.
SMMT projects UK vehicle production will fall to 755,000 units this year, a drop compared to 2024 levels. A recovery is expected in 2026, with a 6.4% increase bringing production above 800,000 units once again.
“There are foundations for a return to growth,” said SMMT Chief Executive Mike Hawes, although he described the half-year results as “disappointing.”
Total car and commercial vehicle output dropped nearly 12% in the first half of 2025, reaching 417,232 units. However, June showed signs of improvement, with production up 6.6% month-over-month to 66,317 units, ending a five-month slide.
Electrified vehicle production remained a bright spot, increasing by 1.8% to 160,107 units — the highest-ever share of total production in the first half of a year. Photo by Elliott Brown, Wikimedia commons.