Business reporter, BBC News
ReutersUK car production sank to its lowest level for May since 1949 as US tariffs hit exports, an industry group has said.
Production fell by nearly a third from a year earlier to 49,810 units, according to the Society of Motor Manufacturers and Traders (SMMT), which – excluding the period hit by the 2020 Covid pandemic lockdowns – was the lowest figure for 76 years.
Exports to the US halved as President Donald Trump’s tariffs caused some UK car makers to halt shipments.
However, US import taxes on UK cars are due to be cut by the end of June, giving cause for optimism, the SMMT said.
The drop in exports to the US came after the Trump administration announced new 25% tariffs on cars and car parts in March.
This “depressed demand instantly forcing many manufacturers to stop shipments”, the SMMT said.
Jaguar Land Rover (JLR) suspended shipments to the US in April, while Aston Martin reduced exports, after the tariffs were imposed early in the month.
The US share of UK exports fell from nearly a fifth to just over a tenth in May.
Production was also hit by continuing work to change factories over to electric vehicle production, the SMMT said.
For example, JLR is shifting Jaguar to being an all-electric brand, and Nissan is preparing for a new Leaf model.
In May, the US and UK reached an agreement that included reducing import taxes on 100,000 British cars per year from 25% to 10%.
This matches the number of vehicles the UK exported last year.
Any cars exported above the quota will be subject to a 27.5% tax.
The deal is due to come into force before the end of June, so the existing 25% tariffs “should hopefully be a short-lived constraint” on production, the SMMT said.
Mike Hawes, the SMMT’s chief executive, said while 2025 had been “an incredibly challenging year”, there was still “some optimism for the future”.
He said trade deals with “crucial markets”, including the US, India, and the EU, plus UK government strategies on industry and trade, “should help recovery”.
The SMMT also said the recently-announced UK industrial strategy included plans for lower energy costs for manufacturers and a £2.5bn automotive capital and research and development fund.
