The Society of Motor Manufacturers and Traders (SMMT) reported a steep decline in UK vehicle production at the start of 2026, with total output falling 13.6 per cent compared with January 2025. A total of 67,415 vehicles were produced, including 65,249 cars and 2,166 commercial vehicles. While car production dropped by 8.2 per cent, commercial vehicle output plummeted 68.6 per cent year on year.
The decline was largely driven by reduced demand from overseas markets, particularly outside Europe, highlighting the UK automotive sector’s exposure to fluctuations in global trade. Domestic demand remained relatively stable, but export volumes softened, contributing to the overall contraction.
The United States remained the second-largest export market for UK-built vehicles after the European Union, taking 14.1 per cent of shipments. Japan accounted for 2.7 per cent, while China and Turkey each received around 2.5 per cent and 2.4 per cent, respectively.
Production of electrified vehicles, including battery electric vehicles (BEVs), plug-in hybrids, and hybrid models, also declined. Output fell 10.6 per cent to 26,854 units, representing 41.2 per cent of total car production. Despite the decline, electrified models continue to form a significant portion of UK manufacturing as companies transition toward zero-emission platforms.
Mike Hawes, chief executive of the SMMT, described January’s figures as disappointing but highlighted expectations for recovery later in the year as new electric models enter production. He said, “Weak exports to markets beyond Europe amid soft demand delivered a disappointing start to the year for UK vehicle manufacturing. It reinforces the need for a forward-looking trade agenda that secures existing preferential access and builds new ones with markets worldwide.”
The trade body cited subdued global demand and protectionist measures in some markets, along with “made in Europe” proposals, as additional challenges weighing on production.
Looking ahead, the SMMT forecasts overall car production to rise by more than 10 per cent in 2026, reaching around 790,000 units, with the potential to hit one million by 2027 if new model launches remain on schedule and investment conditions stay supportive. The outlook depends on competitive energy costs, a strong domestic market, and targeted supply chain support as the sector continues its capital-intensive shift toward electrification.
The figures underscore the ongoing sensitivity of UK vehicle manufacturing to global trade dynamics, particularly as manufacturers expand production of electric and hybrid vehicles while navigating international market challenges.
