Cyber disruption, tariffs and restructuring drive 15.5% fall in UK vehicle production

UK vehicle production suffered a sharp decline in 2025 as manufacturers navigated disruption, restructuring and heightened trade uncertainty, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

Total output fell by 15.5% over the year, with 764,715 cars and commercial vehicles leaving UK factories. Car production declined by 8.0% to 717,371 units, while commercial vehicle (CV) volumes dropped dramatically by 62.3% to 47,344 units. The fall reflects a challenging period for the sector, shaped by a cyber incident that halted production at the UK’s largest automotive employer, the consolidation of two CV plants into a single site, and ongoing restructuring as manufacturers adapt operations for a decarbonised future. Uncertainty around US tariffs and wider global trade conditions also weighed on output.

Commercial vehicle production continued to struggle towards the end of the year, with December marking a ninth consecutive monthly decline as volumes fell by 67.7%. Car manufacturing, however, showed signs of stabilisation. December car output rose by 17.7% to 53,003 units, ending four months of decline and offering cautious optimism for the year ahead. Across 2025 as a whole, production for the UK market fell by 8.2% to 161,545 units, while exports declined by 7.9% to 555,826 units, meaning exports accounted for 77.5% of total car production.

Europe remained the UK’s largest export destination, taking 56.7% of shipments, followed by the US and China. Exports to all three markets fell, with shipments to the US down 18.3%, reflecting tariff uncertainty earlier in the year.

Electrified vehicle production was a notable bright spot. Output of battery electric, plug-in hybrid and hybrid cars rose by 8.3% to a record 298,813 units, representing 41.7% of all car production. With next-generation electric models entering production, including new volume EV output in Sunderland, the SMMT expects momentum to build in 2026.

Independent forecasts suggest UK car production could return to growth next year, rising by more than 10% to around 790,000 units, with total light vehicle production reaching 824,000. If new model launches remain on track and conditions improve, annual output could reach one million vehicles by 2027.

Commenting on the figures, Mike Hawes, chief executive of the SMMT, said: “2025 was the toughest year in a generation for UK vehicle manufacturing, but the outlook for 2026 is one of recovery. The launch of a raft of new, increasingly electric, models and an improving economic outlook in key markets augur well.”

However, he warned that recovery would depend on the right policy environment. “The key to long-term growth is the creation of competitive conditions for investment, including reduced energy costs, the avoidance of new trade barriers and a healthy, sustainable domestic market. Government has set out how it will back the sector with its Industrial and Trade Strategies, and 2026 must be a year of delivery.”

The industry said progress on these commitments will be critical to restoring competitiveness, supporting the supply chain and securing the UK’s position as a leading, export-led automotive manufacturing base.