Cheap Chinese cars will plan a ‘privotal’ role in the transition to electric motoring by winning over younger drivers.
British car and van production is set to fall to one of the lowest ever, an industry trade body warned.
Factories produced a total of 905,233 units in the year, including cars and commercial vehicles, the Society of Motor Manufacturers and Traders (SMMT) said, representing an 11.8 per cent year-on-year decline – the sharpest drop since the pandemic.
The group forecast that car production is set to decline even further this year as the Stellantis plant in Luton is closed.
The SMMT said the latest independent production outlook expects UK car and light van production to be around 839,000 units in 2025 before rising to 930,000 units in 2027, with the potential to get back above one million units in 2028, and over 1.1 million by 2030.
If accurate, this years production forecast may rival the record lowest number of cars – 769,000 cars 0 produced in the UK in 1954. The highest production record was in 1972 when 1.92 million vehicles were built.
Nearly eight-in-10 cars produced in the UK were destined for export last year, with 77.5 per cent (467,937 units) shipped to the EU, US and China, the top three markets. Exports to the EU and China were down 24.3 per cent and -21.8 per cent respectively, but those to the US were up 38.5 per cent.
Car makers in the UK spent a sizeable part of last year retooling its factories to be able to produce more electric vehicles (EVs) under a mandate from the government, even as it struggled with weakness in wider global markets.
Jaguar closed its Castle Bromwich production lines and both Nissan and Mini significantly reduced the number of cars they produced after installing equipment to build electric vehicles at their factories in Sunderland and Oxford respectively
The numbers of new battery electric, plug-in hybrid (PHEV) and hybrid vehicle (HEV) vehicles fell 20 per cent the SMMT said. Despite the decline, which was anticipated the SMMT said, it added accounted for over a third of production, the second highest on record.
Car companies announced investment of more than £20bn in electric vehicle (EV) production in 2023 and a further £3.5bn in 2024 so the decline will be temporary, the SMMT forecast.
Mike Hawes, SMMT chief executive said the industry was still going in “one direction” but added there was fierce competition to attract investment.
“UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world. Growing pains are inevitable, so the drop in volumes last year is not surprising. With new, exciting models and battery production on the horizon, the potential for growth is clear,” he said.
He called for moves to incentivise consumers to buy EVs as well as having a tariff-free enhanced trade partnership with the EU, which remains the biggest market for exports.
The fall in UK production comes as a new analysis by Auto Trader, the online car sale site, predicted Chinese electric cars are set to flood the UK with more than 400,000 on the road by 2030.
Auto Trader forecast that one in four of all electric vehicles will be made by Chinese car makers by the time the UK bans the sale of petrol and diesel cars, despite concerns over price and privacy of them.
The car seller also questioned drivers about their attitudes towards vehicles
from China. Only 41 per cent of over-55s were keen on the Chinese brands, voicing concerns over data security. Many also questioned the quality of the vehicles.
More than half (57%) of younger drivers (17-34 age group) , were attracted by the lower prices. With competitively priced vehicles such as the Leapmotor T03, which starts at £15,995.
Auto Trader said Chinese built vehicles would play an increasingly ‘privotal’ role in the transition to electric cars by winning over younger drivers.
