7:48 am, January 30, 2025
New car production fell last year amidst a slowdown in the transition to electric vehicles.
That is according to new figures from the SMMT which show that the number of cars built in the UK dipped below the one million mark in 2024.
Overall, a total of 905,233 vehicles rolled off of British production lines, with factories turning out 779,584 cars and 125,649 commercial vehicles.
The result is almost 12% down on the previous year with BEV, PHEV and HEV output declining by 20%.
However, SMMT chief Mike Hawes said that he expected the electric slide to be temporary following £20bn of investment in EV production by car companies in 2023, followed by a further £3.5bn in 2024.
He added that the industry is still going in ‘one direction’ but admitted there remains fierce competition to attract investment.
He called for moves to incentivise consumers to buy EVs as well as having a tariff-free enhanced trade partnership with the EU, which remains the biggest market for exports.
Almost eight in 10 cars built in the UK in 2024 were destined for export, with 77.5% (467,937 units) shipped to the top three markets – the EU (54%), US (16.9%) and China (6.6%).
Exports to the EU and China were down by 24.3% and 21.8% respectively but those to the US rose 38.5%, which the SMMT said emphasised the need for supportive trading conditions across the Atlantic.
Commercial vehicle production increased by 4% last year, the best since 2008, but the number of cars built was affected by issues including factories preparing to switch to EVs, weakness in global markets as well as a slowdown in the transition to electrification amid tough economic conditions, said the SMMT.
December rounded off 10 consecutive months of decline for British car production, falling by 27% compared to the same month a year previously.
Hawes admitted that the sector faced a ‘very difficult year’ but he believed there were opportunities for new jobs as the industry transitions, in areas including software development.
He also insisted that the SMMT retains ‘good access’ to the Labour Government and was encouraged by its industrial strategy plans.
‘Amid significant geopolitical and trade tensions, UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world,’ he said.
‘Growing pains are inevitable, so the drop in volumes last year is not surprising. With new, exciting models and battery production on the horizon, the potential for growth is clear.
‘Securing this future, however, requires industrial and trade strategies that deliver the competitive conditions essential for growth amidst an increasingly protectionist global environment.’
The latest independent production outlook expects car and light van production to be around 839,000 this year, rising to 930,000 in 2027, with the potential to get above one million in 2028 and over 1.1m by 2030.
