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UK Car Production Declines As Focus Shifts To Electric Vehicle Investment
UK car production decreased by 7.6% in the first half of 2024, according to the Society of Motor Manufacturers and Traders (SMMT). Factories produced 416,074 units, which is 34,094 fewer than the same period in 2023. This decline followed a significant drop of 26.6% in June due to multiple model changes.
Electrified vehicle production also saw a decrease of 7.6%, aligning with overall volumes, totalling 157,224 units. These vehicles accounted for 37.8% of total output, unchanged from last year. The shift towards electric models follows £23.7 billion in UK investment announced last year.
Despite a 17.7% increase in car output for the UK market, reaching 106,157 units, this was insufficient to counterbalance a 13.9% decline in export production. Over seven out of ten cars manufactured were intended for overseas customers. The EU remains the largest market for UK car makers, taking 55.4% of all exports in the first six months, equivalent to 171,745 units.
The US, China, Turkey and Australia were other significant export destinations, collectively accounting for 29.4% of overseas orders. Japan, Canada, South Korea, UAE and Switzerland completed the top ten export markets.
The latest independent production outlook predicts that UK light vehicle production will decline by 9.3% this year to around 910,000 units due to structural changes in British plants. However, output is expected to recover to just over 1.1 million units by 2028 when more than half of all UK car and van production is anticipated to be zero emission.
By the end of the decade, production could reach approximately 1.167 million units annually. With favourable political and economic conditions, the UK could produce over nine million zero-emission light vehicles by 2035—600,000 more than current projections—valued at over £290 billion at factory gate prices.
SMMT's Vision for Growth
SMMT's Vision 2035: Ready to Grow outlines a plan to achieve these conditions by focusing on developing the domestic market for EVs, industrial transformation and reskilling workers. It also emphasises providing clean energy and ensuring free and fair trade with global markets.
This vision aligns with the new government's commitment to an industrial strategy and its Automotive Sector Plan. The industry is prepared to collaborate with the government to ensure long-term success for the sector and those reliant on it for mobility and services.
Quotes from Industry Leaders
Mike Hawes, SMMT Chief Executive said: "The UK auto industry is moving at pace to build the next generation of electric vehicles – a transition that can be a growth engine for the entire British economy." He added that commitments to gigafactories and decarbonised energy supply would boost competitiveness and sustain employment nationwide.
Hawes emphasised that amid fierce global competition: "Industry and government must work quickly to deliver those commitments," creating an industrial strategy that enables economic growth.
About SMMT
The Society of Motor Manufacturers and Traders (SMMT) represents one of the largest trade associations in the UK automotive industry. This sector is crucial for economic growth and achieving net-zero emissions while positioning the UK as a global trade hub.
The automotive industry contributes £93 billion turnover and £22 billion value added annually to the UK economy while investing around £4 billion each year in R&D. It employs nearly one million people directly or indirectly across various regions outside London and South-East England.
The sector accounts for 12% of total UK exports of goods with more than 140 countries importing UK-produced vehicles generating £115 billion in total automotive imports and exports annually.
Diverse Manufacturing Capabilities
The UK manufactures almost every type of vehicle including cars, vans, taxis, trucks buses coaches specialist off-highway vehicles supported by over 2,500 component providers some world's most skilled engineers vibrant aftermarket remanufacturing industries also support jobs key sectors advertising chemicals finance logistics steel
The automotive industry supports jobs in other key sectors such as advertising chemicals finance logistics steel More detail on UK Automotive available SMMT's Motor Industry Facts publication www.smmt.co.uk/reports/smmt-motor-industry-facts/ Broadcasters SMMT has ISDN studio access expert spokespeople case studies regional representatives
{TABLE_X}{INSTAGRAM_X}The sector looks forward to collaborating with new government on an industrial strategy centred around automotive advancements ensuring sustained growth competitiveness employment well-paid skilled jobs nationwide
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