UK car production is building momentum with an increase of 11.7% in the first half of the year to 450,168 units, according to the latest figures from the Society of Motor Manufacturers Traders (SMMT).
The performance represented the best first half since 2021 as manufacturers were increasingly able to manage global supply chain challenges – notably the shortage of semiconductors – that had constrained production since the pandemic.
The news comes a week after the announcement of the development of a massive new £4 billion gigafactory for the UK, helping anchor EV production for JLR.
Since January, factories have produced an additional 47,037 units, the uplift having been driven by exports which have surged 13.6% to 359,940 units, representing eight-in-ten cars made.
Volumes for the UK are up too, rising 4.5% to 90,228 units.
However, year-to-date output remains -32.5% below 2019 levels, a reflection of structural changes in the sector but also pointing to the opportunity for UK car makers to recover if a globally competitive business investment environment can be assured.
Production of hybrid electric (HEV), plug-in hybrid (PHEV) and battery electric vehicles (BEVs) up 71.6% from January to June to a record total of 170,231 units.
The European Union (EU) remains the UK’s largest export market accounting for 59.5% of all British car shipments, up 11.2% to 214,017 units year to date.
Mike Hawes, SMMT chief executive, said: “UK car manufacturing is growing again, with production – especially of electrified models – increasing and major investment announcements making headlines.
“This is testament to the resilience of the sector and its undoubted strengths – a skilled and productive workforce, world-class R&D, and efficient, productive plants. But we must build on this momentum, sustain growth and attract further investments with a strategy that focuses on competitiveness and which strengthens the UK’s unique automotive offering.”
Industry reaction
Paul Barker, managing editor at Carwow UK, said: “It’s hugely encouraging to see the rate of UK car manufacturing accelerating for the fifth month running as we close H1. These figures are good news all round.
“Following last week’s announcement of Tata Group’s investment into building a new gigafactory in the UK for batteries, it’s particularly pleasing to see that hybrid, plug-in hybrid and battery electric vehicle volumes are up a record-breaking 71.6% from January to June.
“With new and expanded low emission zones being introduced in cities across the country, and the Government staying firm on the deadline to phase out new petrol and diesel cars by 2030, a shift to these categories is essential.
“The need for a widespread scale-up of the number of public charge points for electric vehicles remains vital – especially given the speed at which production of these cars is now occurring.”
Richard Peberdy, UK head of automotive for KPMG, said: “Increased car production volumes are clearing the backlog of car orders that built up over recent years of reduced supply.
“But higher inflation and interest rates are pressuring business investment, at a time when key decarbonisation decisions are being taken, including new product and technology development or greening and on-shoring of supply chains. Decisions taken now will shape the next decade of delivery for car manufacturers.
“Increasingly, the automotive sector is looking at economic conditions globally and making moves now that they feel will serve them best in the medium to longer term. Rules of origin changes in 2024 are one such consideration – and manufacturers on both sides of the Channel are hoping for an agreeable resolution that accounts for the battery manufacturing industry in Europe still being in its infancy.”