SMMT: Car Manufacturing Challenges Amid Industry Pressure

UK car production experienced a sharp downturn in November, marking a -30.1% decline compared to last year's period. According to the Society of Motor Manufacturers and Traders (SMMT), it represents the ninth consecutive month of reduced output. A total of 64,216 vehicles were manufactured, a decrease of 27,711 units from November 2023.

The decline stems from multiple factors, including strategic shifts, global market instability and production timing adjustments following last year's recovery from Covid-induced supply chain disruptions.

Production hits historic low

The November figures represent the weakest performance for the month since 1980. UK manufacturers transitioning to EV production saw significant declines across the board. Domestic and export markets suffered, with output falling by -56.7% and -21.3%, respectively.

Over 80% of vehicles produced were destined for export, with more than half (52.3%) shipped to the European Union.

Despite these challenges, electrified vehicles — battery electric, plug-in hybrid and hybrid models — accounted for nearly a third (29.8%) of total production in November. However, the volume of these vehicles also dropped by -45.5%, reflecting the ongoing transition to EV production.

Year-to-date figures reveal over a quarter of a million electrified vehicles produced, down -19.7% compared to the same period in 2023 due to model switchovers at major plants.

Year-to-date decline

From January to November 2024, UK car production fell by -12.9%, with 734,562 units produced. It marks a reduction of 108,787 vehicles from 2023 and nearly half a million fewer than 2019 pre-pandemic levels.

The decline aligns with the broader restructuring of the global automotive industry as manufacturers shift from internal combustion engines (ICE) to EV production. Plant closures and the transition to new technologies and models have contributed to this expected decline.

EV transition and economic pressures

As the global automotive industry pivots toward decarbonisation, the UK is positioned as a leader, bolstered by recent EV and battery production investments.

However, domestic and international consumer confidence remains low, with new car registrations showing minimal growth in the UK and Europe (up just 0.4% in the first 11 months of the year). The sluggish demand has compounded the challenges facing manufacturers.

Government intervention is critical to mitigating these issues. Measures such as consumer incentives for EV purchases, accelerated infrastructure development and an industrial and trade strategy promoting competitive conditions could alleviate financial pressures on the industry. 

Mike Hawes, SMMT Chief Executive, highlighted the need for immediate action: "These figures offer little Christmas cheer for the sector."

"While a decline was expected given the extensive changes underway at many plants, manufacturing is under pressure at home and abroad, with billions of pounds committed to new technologies, models and production tooling."

Calls for regulatory action

The domestic EV market's slower-than-expected growth has heightened the urgency for government support.

Hawes called for decisive action, including publishing the consultation on changes to the 'ZEV mandate' regulation, which is crucial for linking local market growth with robust domestic production.

"Government can help by supporting consumers in the transition, fast-tracking its industrial strategy for advanced manufacturing and, most urgently, reviewing the market regulation which is putting enormous strain on the sector," Mike stated.

2025 and beyond

The UK automotive industry's challenges support the importance of strategic interventions to transition to a decarbonised future. By addressing financial pressures, fostering innovation and enhancing consumer confidence, the sector can aim to reverse the downward trend and secure its position in the global EV market.

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