UK car production falls to its lowest level in more than four decades as carmakers struggle to meet falling demand
British car production has fallen to the lowest level in more than four decades as carmakers struggle to meet falling demand.
It comes as ministers come under increasing pressure to relax electric vehicle targets, amid warnings from the industry that it could lead to factory closures and job losses.
Some 64,216 new cars rolled off UK production lines last month, a 30 percent drop on last year, according to industry body Society of Motor Manufacturers and Traders (SMMT).
It was the worst monthly performance for the sector since 1980, when Britain was gripped by industrial unrest and rising inflation.
The SMMT highlighted that all major car manufacturers in Britain have seen production declines, with electric vehicle production falling by almost 46 percent.
So far this year, car production is down almost 13 percent compared to 2023, to 734,562 vehicles.”
‘These figures offer little Christmas cheer for the sector. While a decline was expected given the significant changes underway at many factories, production at home and abroad is under pressure,” said Mike Hawes, head of SMMT.
Some 64,216 new cars rolled off UK production lines last month, down 30% on last year
So far this year, car production is down almost 13% compared to 2023, at 734,562 vehicles
Vauxhall parent company Stellantis says it will close its van factory in Luton next year to consolidate production at the Ellesmere Port plant
He added: ‘The government can help by supporting consumers in the transition, by accelerating its industrial strategy for advanced manufacturing and, most urgently, by reviewing market regulations that are putting enormous pressure on the sector.’
The grim figures come at a time when British carmakers have sounded the alarm about the state of the industry.
Last month, car giant Stellantis announced plans to close its van factory in Luton, putting 1,100 jobs at risk.
US group Ford has also said it plans to cut 800 jobs in Britain over the next three years. There are currently 5,300 people working in Great Britain.
The closures and cuts come amid a growing row between the industry and ministers over targets designed to increase the number of electric cars on the road.
Electric cars must make up at least 22 percent of carmakers’ sales this year as part of the Zero Emission Vehicle (ZEV) mandate introduced into UK law earlier this year.
The threshold increases annually, rising to 28 percent in 2025 and ultimately rising to 80 percent in 2030.
Companies that do not meet the required annual targets face heavy fines.
Labor has also pledged to reintroduce a ban on new petrol and diesel cars by 2030, after the Conservative government previously pushed back the deadline to 2035.
Some hybrids will get a five-year stay of execution before all new cars with internal combustion engines are banned by the middle of the next decade.
Electric cars must make up at least 22% of carmakers’ sales this year, a figure that will rise to 80 percent by 2030
Business Secretary Jonathan Reynolds admitted to MPs last month that the electric vehicle mandate was ‘not working the way anyone intended it to work’
New Automotive’s ZEV tracker shows Tata and Toyota, Jaguar Land Rover’s parent company, are the two manufacturers most likely to miss the targets
But carmakers have urged the government to reconsider the targets, warning that falling demand for electric vehicles from consumers means they will be forced to close factories and cut jobs instead.
The government’s position appears to have softened when Business Minister Jonathan Reynolds admitted to MPs last month that the electric vehicle mandate was “not working the way anyone intended it to”.
There will be an announcement soon – although now likely in the new year – on relaxing the ZEV mandate rules to ease the burden on manufacturers as automakers also face difficulties abroad.
German giant Volkswagen is currently in talks with the country’s powerful unions after around 100,000 workers went on strike to protest plans to close factories and cut wages.
Meanwhile, Japanese groups Honda and Nissan have begun discussions on a possible merger to combat growing competition from bigger rivals.
Audi this month also confirmed the closure of its Brussels EV factory due to falling demand for battery cars, while Ford has also said in recent weeks that it is scaling back production of its new Explorer and Capri EVs due to concerns about a lack of orders .
Industry observers have said all major car brands are suffering from a toxic cocktail of sluggish demand for electric cars and increasing competition from China.
Chinese automakers, thanks to substantial subsidies from Beijing, have begun to dominate their domestic market and are now trying to break into other countries, making the sector more competitive.
