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Monday, January 13, 2025

Car Makers Struggle as UK Production Hits Record Lows

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UK car production plunged by 30.1% in November, marking the ninth consecutive month of decline.

Only 64,216 vehicles left factory lines, 27,711 fewer than November 2023, as strategic product decisions, weak global markets, and factory calendarisation contributed to the drop.

Domestic output plummeted by 56.7%, while exports fell 21.3%, with 83% of cars heading overseas—more than half to EU markets.

Despite producing 19,165 electrified vehicles in November, including battery electric, plug-in hybrid, and hybrid models, overall volumes for these dropped by 45.5%.

Between January and November, 258,938 electrified vehicles were made, but that figure is down 19.7% compared to the same period in 2023.

Year-to-date car production has slumped by 12.9% to 734,562 units, representing a loss of 108,787 cars compared to last year and a staggering 500,000 fewer than pre-pandemic 2019 levels.

This steep decline coincides with major global restructuring in the automotive sector, as manufacturers pivot from internal combustion engines to electric vehicle production.

UK factories are undergoing extensive retooling for the electrification shift, which has significantly impacted output.

Consumer confidence remains weak across domestic and international markets, further dampening demand.

While UK automotive manufacturing is positioned to benefit from recent investments in electric vehicles and battery plants, the transition has yet to fully materialise.

New car registrations in the UK and Europe have risen by a modest 0.4% so far this year, underscoring a sluggish recovery.

Industry leaders urge the government to step in with incentives for private consumers, accelerated EV infrastructure development, and an industrial strategy to reduce costs and attract investment.

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), highlighted the urgency of action.

“These figures offer little Christmas cheer for the sector,” Hawes said, pointing to the strain from market regulations and the pressing need for a competitive framework.

He called for the rapid publication of a consultation on changes to the Zero Emission Vehicle (ZEV) mandate, noting the critical link between a thriving domestic EV market and robust production.

As governments worldwide push for decarbonisation, the UK’s automotive industry faces mounting pressure to keep pace while navigating financial challenges.

Strategic support is essential to enable the sector to seize emerging opportunities and sustain production during this transformative period.

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