UK car production experienced a notable decline in September, driven by a strategic shift towards electric vehicles.
- Production for the domestic market dropped by 20.8%, with exports seeing a 20.6% decrease, significantly impacting overall performance.
- China’s economic slowdown has contributed to a 23.1% reduction in UK car exports, while European market troubles further decreased shipments by 28.6%.
- Despite these declines, UK exports to the US increased by 24.6%, highlighting the diverse challenges and opportunities in global markets.
- The move towards electric and hybrid vehicles is reshaping production lines, with nearly a third of September’s output focusing on greener technologies.
The UK automotive sector witnessed a significant downturn in September production figures, according to the Society of Motor Manufacturers and Traders (SMMT). Both domestic and export markets reported declines, with the UK market experiencing a 20.8% fall and exports shrinking by 20.6%. The comparison is stark against a particularly strong performance in September 2022. Although domestic production showed a modest increase over the year, it was not enough to counterbalance the 14.4% drop in exports, resulting in an overall production decrease of 10.2%, amounting to 592,862 units.
The decrease in exports has been notably felt in key markets, especially China, which experienced a 23.1% reduction in UK car imports due to its current economic slowdown. China’s GDP growth of 4.6% fell short of the government’s 5% target, influencing the demand for imported vehicles. In response, China has initiated measures to boost its economic growth, but the effects are yet to materialize fully.
In Europe, the situation was similarly challenging. UK car exports to the EU, the largest overseas market, experienced a sharp 28.6% decrease to 26,825 units. This decline aligns with weakened car sales across the EU, where the market saw an 18.3% reduction in August, marking a three-year low.
Amid these declines, the US market provided some relief with a 24.6% increase in UK car exports, rising to 8,210 units and accounting for 16% of total exports. This growth points to varied performance across global markets and underscores the UK automotive sector’s adaptability and resilience.
The shift towards electric and hybrid vehicles fundamentally altered production priorities. As the UK gears up to phase out internal combustion engines by 2030, nearly a third of all vehicles produced in September were electric or hybrid models. This transformation, described as ‘short-term’ by SMMT’s Chief Executive Mike Hawes, requires conducive industrial conditions and government support to foster growth. Hawes urged the government to leverage the upcoming Autumn Budget to boost confidence and investment in the automotive sector.
Despite the current challenges, the UK automotive industry remains the nation’s leading exporter of manufactured goods, accounting for 13.9% of total exports in the first half of 2024. As manufacturers pivot to zero-emission vehicles, the sector’s future success hinges on supportive policies and continued investment to sustain its global competitiveness.
The UK automotive industry is undergoing pivotal changes, balancing production shifts with global market dynamics and the push towards sustainable technologies.
