UK car production falls 14.4% due to model changeovers, supply issues

UK car production saw a significant drop of 14.4% in July 2024, with a total of 65,478 vehicles leaving factory lines, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

The decline is largely attributed to model changeovers and temporary challenges in the supply chain which have disrupted output.

Despite the overall reduction, the production of electrified vehicles - comprising battery electric, plug-in hybrid, and hybrid models - remained relatively stable.

These vehicles accounted for 37.5% of the total output in July, only slightly down from 39.5% in the same month last year, even as their volume dropped by 18.6%.

Production for the domestic UK market experienced a smaller decline of 5.1%, equating to 672 fewer units.

Notably, over 80% of the cars produced in July were destined for export markets. The European Union was the largest recipient, accounting for 51.3% of exports, followed by the United States (17.6%), China (8.6%), Turkey (5.5%), and Japan (3.1%). However, total export volumes for the month were down by 16.3%.

Year-to-date figures present a mixed picture: while domestic production has risen by 14.8%, export volumes have decreased by 14.3%.

Despite these challenges, the total value of UK automotive output remains robust, exceeding £20 billion at factory gate prices, comparable to the same period last year. This underscores the high value of the UK automotive industry, even amid production fluctuations.

SMMT chief executive Mike Hawes commenting on the figures, said: "Following significant growth last year, some readjustment in output was to be expected. Indeed, an ongoing degree of volatility is likely as the industry restructures to transition to zero-emission vehicle production.

"As the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness."

Hawes stressed the need for continued investment in skills, access to cheaper green energy, and the importance of fair trade deals to support the industry and called for a comprehensive industrial strategy to ensure the UK sector remains a key driver of economic growth.

Responding to SMMT July UK car manufacturing data. Richard Peberdy, UK head of automotive for KPMG, said: “So far in 2024, car production for the domestic market is up, driven by demand from fleet buying, but the drop-off in manufacture for export has left overall production volumes down on this time last year. 

"Production has also been slowed by car makers having to further gear up factory floors for new EV and hybrid models and an increasingly electric future.

"With car makers mandated to scale-up the percentages of electric vehicles that they sell each year, questions continue to remain about how industry and government can increase new electric vehicle sales in keeping with the levels required by the Zero Emission Mandate.”