UK car production falls to lowest level since 1954 | Automotive industry

British car production fell in 2024 to its lowest level in seven decades – barring the coronavirus pandemic – as the industry struggles with weak demand and prepares to shift away from fossil fuels to electric vehicles.

The number of cars made in the UK fell to 780,000 during the year, the lowest since 1954, except for during the pandemic when first factories were forced to close and then supply chain problems caused shortages of computer chips, according to the Society of Motor Manufacturers and Traders (SMMT), a lobby group.

Mike Hawes, the SMMT’s chief executive, said the decline last year was down partly to factories pausing while they switched to electric production. However, he added that the industry is still struggling with weak global demand, and slower-than-expected growth in electric car sales.

In 1954, the UK car industry was dominated by the recently formed British Motor Corporation, a merger of the Morris and Austin brands. Those were straitened times: it was only in July of that year that the government finally ended second world war rationing.

By contrast, car buyers in 2024 can choose from an array of technologically advanced vehicles built all over the world. Yet amid tough competition, the UK is struggling to retain its position as a large-scale automotive manufacturer.

The car production figures have been skewed by the 2021 decision of Vauxhall owner Stellantis to switch production from cars to vans at its factory in Ellesmere Port, Cheshire. When taking vans into account, the UK industry produced 905,000 vehicles in 2024, although that was still a decline of 12% compared with 2023.

Output has also slowed during production pauses by several carmakers as they switch equipment on factory lines to make zero-emission EVs. Most notably, JLR last year paused all production of its Jaguar brand ahead of a polarising relaunch as an all-electric brand.

“It’s an uncertain time,” said Hawes. “In the cyclical mode we’re more towards the low end of that transition.”

Nissan retained its position as the largest car manufacturer in the UK, although production at its Sunderland factory fell by 13%.

Jaguar Land Rover was the second-biggest producer. The company, owned by India’s Tata, on Wednesday reported record revenues of £7.5bn for the last three months of 2024, and the highest profits for a decade. However, it warned of a “challenging economic backdrop”.

British manufacturers are bracing for more disruption if Donald Trump imposes tariffs on imports into the UK’s second-largest market. Hawes said the UK industry was hoping to avoid the levies, but added that many of its exports are luxury cars whose buyers may be willing to absorb a tariff on top of the import price.

The industry is also hoping for the UK government to relax rules, known as the zero-emission vehicle mandate, that force carmakers to sell an increasing number of electric cars every year.

Hawes also welcomed the possibility of government loan guarantees to try to stimulate demand for electric cars and help to meet the mandate, after a report by the Financial Times claiming that officials are considering the move. However, he added that subsidies would have to be “substantial”.

The prospects of the UK changing course and regaining its position as a high-volume producer appear distant. Forecasts prepared for the SMMT by AutoAnalysis, a consultancy, suggest that it may take until 2028 for car and van production to top a million once more.

That is a far cry from the 2m production target set as recently as 2017. Since then, years of political uncertainty caused by the Brexit vote and the pandemic have contributed to the closure of several plants. Stellantis shocked the industry again in November 2023 with a plan to close its van factory in Luton.