UK car production dropped 20.6% in September 2024, driven by a shift to electric vehicles and a decline in export volumes.
- Domestic market production declined by 20.8%, while exports decreased by 20.6% compared to a robust September 2022.
- However, overall year-to-date production is down by 10.2%, with significant declines in shipments to key markets like China and the EU.
- Demand in the US market increased, offsetting some losses, with exports rising by 24.6% in September.
- Automakers are retooling for electric vehicle production to align with the UK’s 2030 zero-emission target.
According to the Society of Motor Manufacturers and Traders (SMMT), UK car production saw a significant drop in September 2024, with output for both domestic and export markets declining sharply. Production for the UK market decreased by 20.8%, and exports fell by 20.6%. September 2022 was an exceptionally strong month, which makes this year’s decline appear more pronounced. Although there has been a 6.5% growth in domestic production year-to-date, a 14.4% decrease in exports has led to an overall production downturn of 10.2%, totalling 592,862 units so far this year.
The decline in export volumes affected several crucial international markets. Shipments to China, a major destination for UK car exports, fell by 23.1% in September. China’s economic slowdown, with a GDP growth of 4.6% in the third quarter of 2024 below its 5% target, has weakened demand for imported vehicles. The Chinese government has introduced growth-boosting measures in response. Exports to the European Union, the UK’s largest car export market, also plummeted by 28.6% to 26,825 units in September, coinciding with a broad decline in EU car sales. The European Automobile Manufacturers’ Association reported an 18.3% drop in EU car sales in August, hitting the lowest level in three years, impacting major markets like Germany, France, and Italy.
In contrast, the United States market provided a silver lining, with UK car exports rising by 24.6% to 8,210 units in September, constituting 16% of the total UK car shipments. This increase in demand from the US helped offset some of the losses encountered in other markets.
The decrease in production is largely due to automakers adapting their factories for the production of electric and hybrid vehicles. This shift aligns with the UK’s target to phase out internal combustion engine vehicles by 2030. In September, nearly one-third of vehicles produced in the UK were either battery electric, plug-in hybrid, or hybrid models, illustrating the industry’s commitment to greener technologies. Mike Hawes, SMMT’s chief executive, characterised the decline as anticipated and short-term, but underscored the need for supportive industrial and market conditions. Hawes urged the government to use the upcoming Autumn Budget to encourage investment, boost business confidence, and secure the global competitiveness of the UK’s automotive sector.
Despite current challenges, the automotive industry continues to be the UK’s largest exporter of manufactured goods, increasing its share of the nation’s total exports to 13.9% in the first half of 2024. As manufacturers pivot to zero-emission vehicles, they will depend on government initiatives and investment to maintain their competitive stance globally and meet the increasing demand for electric vehicles.
The UK automotive sector is in transition, balancing declining traditional car production with growing focus on electric vehicles, requiring strategic support to ensure future competitiveness.
