UK vehicle production on track for 1 million units

The UK's vehicle assembly plants are expected to produce about a million cars and vans this year, well above an earlier forecast, following a recent round of investments in the sector according to the Society of Motor Manufacturers and Traders (SMMT).

The latest projection is 18% higher than the output in 2022, the worst year for UK car production since 1956, but lags the 1.5 million or more cars produced pre-pandemic.

The SMMT had forecast production of 860,000 cars in 2023 but it said easing supply chain issues have been aiding the UK's car industry.

A total of 91,521 units rolled out of factory lines in the country in October, SMMT said, up 31.6% year-on-year.

The total was the best October performance since 2019.

Production for the home and overseas markets grew by 23.9% and 33.4% respectively, with exports driving output.

SMMT chief executive Mike Hawes said: “These figures, coming on the back of a series of significant investment announcements, signpost a bright 2024 for the UK automotive sector.

“Government and industry are committing billions to transform the industry for a decarbonised future.”

The SMMT has warned that UK automotive’s potential to drive economic growth will be diminished without a deferral of upcoming rules of origin.

Battery electric vehicles (BEVs) made in the EU could be hit with a £3,400 tax hike when sold in the UK if new rules of origin are implemented in January, according to the automotive trade body.

The UK-EU Trade and Cooperation Agreement (TCA) temporarily exempted electric vehicles (EVs) from the rules that said products must be substantially made in Britain or the bloc to qualify for the EU’s zero tariff, zero quota regime, because EV batteries are predominantly imported from Asia.

The tariff exemptions, which were agreed as part of the Brexit deal, are due to end from January 1, 2024.

Unless a new deal can be struck, under the more restrictive rules the only way to avoid these duties will be to source all battery parts and some critical battery material in the EU/UK, which manufacturers say is practically impossible to achieve today.

The SMMT says that it would ‘throttle’ the trade in EVs between the UK and EU.