UK Car Manufacturing Declines 15% in 2025 – Is a Turnaround Coming?

Toughest Year for UK Vehicle Manufacturing in a Generation

New data from the Society of Motor Manufacturers and Traders (SMMT) reveals that 2025 marked the most challenging period for UK vehicle production in a generation. Overall output fell by 15%, with just 717,371 cars and 47,344 commercial vehicles rolling off production lines. This represents a decline of 8% for cars and a substantial 62% for commercial vehicles compared to 2024.

The Factors Behind the Production Decline

The SMMT identified several major issues that constrained manufacturing throughout the year. A significant cyber attack on JLR halted production at one of Britain's most important manufacturers, new tariffs affecting transatlantic trade created additional barriers, and ongoing factory restructurings for the shift towards decarbonisation all contributed to the downturn.

Both domestic and export markets felt the impact equally, with production for the UK market and exports both falling by approximately 8%.

Electric Vehicle Production Bucks the Trend

Despite the overall decline, one area showed strong growth: electrified vehicle production. Output of battery electric, plug-in hybrid and hybrid cars increased by 8.3% to just under 300,000 units. This represented a record 41.7% share of total UK car production, signalling the industry's accelerating transition towards cleaner technologies.

The SMMT predicts this trend will continue in 2026 with the planned launch of seven new electric vehicle models, which is expected to help total car production return to growth. Output is forecast to rise by more than 10% this year.

Export Markets and Executive Outlook

Europe remained the dominant export market, receiving 56% of UK-built vehicles shipped abroad. The United States followed with 15%, while China accounted for 6.3% of exports.

Mike Hawes, SMMT Chief Executive, commented: "2025 was the toughest year in a generation for UK vehicle manufacturing. Structural changes, new trade barriers, and a cyber attack that stopped production at one of the UK's most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery."

He added: "The launch of a raft of new, increasingly electric models and an improving economic outlook in key markets augur well. The key to long-term growth, however, is the creation of the right competitive conditions for investment, reduced energy costs, the avoidance of new trade barriers, and a healthy, sustainable domestic market."

UK Vehicle Production by Manufacturer: 2025 Performance

Mixed Results Across Manufacturing Plants

The performance varied significantly between manufacturers. Nissan's Sunderland plant, producing the Juke, Leaf and Qashqai, saw a modest 3.1% decline from 282,124 vehicles in 2024 to 273,322 in 2025.

JLR experienced the most substantial downturn among volume manufacturers, with output falling 21.7% from 257,110 to 201,283 vehicles across its Castle Bromwich, Halewood and Solihull plants.

Bright Spots in the Production Data

Mini's Oxford plant bucked the trend with a 12.2% increase in production, rising from 110,742 to 124,271 vehicles. Similarly, Leyland Trucks recorded a 6.6% increase from 14,205 to 15,141 commercial vehicles.

Toyota's Burnaston plant in Derby saw a 7.9% decline in production of the Corolla and Suzuki Swace, falling from 100,009 to 92,136 units.

Significant Restructuring Impacts

Stellantis's operations at Ellesmere Port and Luton were heavily impacted by restructuring, with production plummeting 70.6% from 105,450 to just 31,048 vehicles as the facilities transition to electric van production.

Bentley's Crewe facility experienced a 7.7% decline, while smaller manufacturers including Aston Martin, Lotus, McLaren, Morgan and Rolls-Royce collectively saw production fall by 29.2%.

Overall Production Figures

Total UK vehicle production across all manufacturers fell from 905,233 in 2024 to 764,715 in 2025, representing an overall decline of 15.5%.

While 2025 presented significant challenges for Britain's automotive sector, the increased focus on electric vehicles and planned new model launches suggest 2026 could mark the beginning of a recovery phase for UK manufacturing.