UK vehicle production fell by -15.5% in 2025, marking what the Society of Motor Manufacturers and Traders (SMMT) has called the “toughest year in a generation” for British car building.
Factories turned out a total of 764,715 units last year, down significantly on 2024. While car production fell by a manageable -8.0%, the Commercial Vehicle (CV) sector faced a collapse, with output dropping by -62.3% as factories consolidated.
Mike Hawes, SMMT Chief Executive, said: “2025 was the toughest year in a generation for UK vehicle manufacturing.
“Structural changes, new trade barriers, and a cyber attack that stopped production at one of the UK’s most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery.”
2025: A perfect storm
The SMMT attributed the sharp decline to a combination of distinct factors that strangled output throughout the year:
Cyber attacks: A major cyber incident halted production at Britain’s biggest automotive employer, causing significant downtime.
Tariffs: New trade tariffs across the Atlantic impacted exports to the US (down -18.3%).
Restructuring: Several major plants went offline to retool for a decarbonised future, including the consolidation of two CV plants into one.
Despite the gloomy overall figures, the shift towards electrification continues to accelerate.
Production of electrified vehicles (Battery Electric, Plug-in Hybrid, and Hybrid) rose by 8.3% to nearly 300,000 units. These vehicles now account for a record 41.7% of all cars made in the UK.
With the next generation of volume electric cars starting production in Sunderland, and seven new EV models planned for launch across the UK, the makeup of the future UK car parc is shifting permanently away from pure combustion.
The SMMT forecasts that 2025 was the bottom of the curve. Independent outlooks expect UK car production to return to growth in 2026, rising by more than 10% to approximately 790,000 units.
Overall light vehicle production is anticipated to reach 824,000 units this year, with the potential to hit one million units by 2027 if new model launches stay on track.
Mike added: The launch of a raft of new, increasingly electric, models and an improving economic outlook in key markets augur well.
“The key to long term growth, however, is the creation of the right competitive conditions for investment; reduced energy costs; the avoidance of new trade barriers; and a healthy, sustainable domestic market.
“Government has set out how it will back the sector with its Industrial and Trade strategies, and 2026 must be a year of delivery.”
Europe remains the dominant customer for British-built cars, taking 56.7% of exports, followed by the US (15.0%) and China (6.3%). However, exports to all three major markets declined in 2025.
