The UK vehicle production decline worsened in May 2025, with new data showing a fifth straight monthly drop. According to the Society of Motor Manufacturers and Traders, production fell by 32.8% compared to May last year, down to just 49,810 units. This marks the lowest May output since 1949, excluding 2020, when the pandemic closed factories.
Several factors are behind the slump. Industry experts point to model changeovers, internal restructuring, and international trade pressures—particularly new U.S. tariffs. In April, President Donald Trump imposed a 25% tariff on all imported cars and parts. This led British brands like Jaguar Land Rover and Aston Martin to suspend shipments to the U.S., their largest export market.
The result was a sharp 55.4% decline in shipments to the U.S. in May. Exports to the EU also dropped by 22.5%. The U.S. and the EU remain the U.K.’s two biggest markets for cars.
In early May, Trump eased the tariff for some manufacturers. A new executive order allowed a 10% tariff on the first 100,000 British cars entering the U.S. each year. U.K. Prime Minister Keir Starmer welcomed the change. He said the policy would save Jaguar Land Rover hundreds of millions of pounds.
Despite the relief, the broader outlook remains grim. SMMT reported that total vehicle production for the year now stands at 348,226 units. That’s a 12.9% drop from 2024, putting output at its lowest level since 1953.
Mike Hawes, SMMT’s chief executive, acknowledged the downturn but shared a note of optimism. He pointed to new trade deals and improved EU relations as signs of possible recovery. According to him, government policies that support automotive manufacturing could help revive the sector.
“While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future,” Hawes said. “Trade deals with the U.S. and a better relationship with the EU could support a long-term recovery.”
The automotive sector plays a crucial role in U.K. trade. In 2024, the U.K. exported £9 billion worth of cars to the U.S., which made up over 27% of all vehicle exports. The current slump has raised concerns about job security and future investment in the sector.
As the UK vehicle production decline continues, pressure is mounting on policymakers and manufacturers to adapt. With global competition rising and trade barriers still in place, the road ahead remains uncertain for Britain’s carmakers.
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