The US’s introduction of tariffs on foreign-built vehicles resulted in last month being the worst May for vehicle production in the UK since 1949 – excluding 2020, when Covid-19 lockdowns shuttered many plants.
Several car manufacturers, including Aston Martin, Lotus and JLR, paused shipments to the US following its introduction of a 25% levy on car imports.
This was soon reduced to 10% for the UK, for an annual quote of 100,000 units. Each car over that number – the UK sent 102,000 Stateside last year – is charged the full 25% levy that applies to other nations.
This manifested in a 31.5% reduction, to 49,810 units, in the UK’s output of new vehicles during May compared with the same month in 2024.
Production for export – which accounts for the majority of plants’ outputs – dropped by 27.8% to 37,448 vehicles.
Exports to the US alone fell by 55.4% compared with May 2024.
The Society of Motor Manufacturers and Traders (SMMT) said the renegotiated 10% tariff, due to come into effect by the end of June, should “hopefully” result in the re-establishment of export levels.
However, the ratio of cars exported rose from 74.5% to 78.5%, pointing to additional challenges on the home front. Production for the UK market dropped by 42.1% to 10,275 cars.
It means that for the first five months of 2025, the UK’s total output of new vehicles is at its lowest level since 1953.
The government this week unveiled a new industrial strategy that plans to return the UK to the top 15 vehicle producers by 2030, providing support on energy costs, skills development and trading terms.
SMMT chief Mike Hawes said: “While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future. Confirmed trade deals with crucial markets, especially the US and a more positive relationship with the EU, as well as government strategies on industry and trade that recognise the critical role the sector plays in driving economic growth, should help recovery.”
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