UK car production drops amid calls for 'urgent action' to protect 188,000 automotive jobs

The UK's car production sector has seen a concerning drop in the first half of the year, with experts warning that the industry could face further challenges.

Fresh data shows that the output of new cars and commercial vehicles in the first six months of 2026 declined by 7.5 per cent.

In total, just under 386,000 new vehicles have been produced, compared with 417,000 last year, as June also saw a 1.2 per cent fall.

More than 294,000 of all cars and commercial vehicles produced in the first half of the year were exported, as the UK remains a key export base.

TRENDING

Stories

Videos

Your Say

The Society of Motor Manufacturers and Traders (SMMT), which published the data, argued that the export totals emphasised the importance of "free and fair trade with global markets".

Europe remained the biggest customer of UK-made vehicles, accepting over 58 per cent of all exports - a rise of 3.4 per cent year-on-year.

The United States accounted for 15.8 per cent of exports, while the third-biggest market, China, saw units drop by 44.7 per cent to just 12,323 vehicles.

Several factors have been noted as being responsible for the drop, including the transition to electric vehicles and brand restructuring.

The SMMT explained that wholesale changes would need to be made to ensure the UK reaches its goal of producing more than one million units.

Output would need to grow by around 40 per cent, which is still a possibility, provided new investment can be secured by "making the UK more globally competitive for manufacturing".

Manufacturers and trade organisations have long called for measures to be implemented to ensure the UK remains an attractive destination for automakers and investors.

In recent years, bosses of Stellantis and Nissan have lamented the high energy costs as having a huge impact on profitability, warning that it will turn companies away from the UK.

LATEST DEVELOPMENTS

• Major car brands targeted by Transport for London amid claims they owe '£1billion in unpaid Ulez costs'
• Driving licence rule changes confirmed with thousands of motorists impacted
• Motorists warned as emergency car tech 'may not operate and should not be relied upon' until 2027

Mike Hawes, chief executive of the SMMT, said: "Global vehicle production remains under intense pressure, and the UK is no exception. Global market weakness, trade pressures and uncompetitive costs are taking their toll. But decline is not inevitable.

"Urgent action on energy costs, reform of market regulation and improved trading arrangements with our global partners would ensure the sector can return to growth.

"And given that growth would be across every region in the UK, there is every reason for the new Government to get behind the sector."

He warned that the automotive sector, which has long been described as the "crown jewel" of UK industry, could be at risk, potentially impacting 188,000 workers and more than £85billion in turnover.

It adds £18billion in gross value added, while the wider automotive industry, including retail, maintenance and repair, is estimated to be worth a staggering £400billion.

Mr Hawes pointed to analysis from the SMMT which identified a further £4.6billion in domestic sourcing opportunity by the end of the decade.

The SMMT also called for action on the "Made in Europe" proposals and the Rules of Origin, which could have a massive impact on cross-Channel trade.

It warned that, without any changes, the €80billion (£68billion) trade relationship between the EU and UK could be at risk.

Our Standards: The GB News Editorial Charter