UK car production recovery continues in July

UK car production rose for the second consecutive month in July, climbing 5.6% to 69,127 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The growth reflects a strengthening recovery in the automotive sector, though overall vehicle output was dragged down by a sharp decline in commercial vehicle manufacturing.

Commercial vehicle (CV) output plunged 81.1% compared with July last year, largely due to plant restructuring and an unusually strong performance in July 2024 – the sector’s best July in 17 years. As a result, total vehicle production fell 10.8% to 72,006 units.

Car production for both domestic and overseas markets improved, rising 13.6% and 3.7% respectively. Exports continued to dominate the sector, accounting for 79.4% of all UK-built cars.

The EU remained the leading export destination, taking a 45.6% share of shipments, followed by the US (18.1%), China (7.7%), Turkey (7.2%), and Japan (3.4%). While exports to the EU and China dipped 7.9% and 7.1% respectively, shipments to Turkey and Japan surged 35.4% and 14.9%. Exports to the US rose 6.8% to almost 10,000 units, reversing three consecutive months of decline.

The US remains the single largest national market for British-built cars, underscoring the significance of the UK-US trade deal, which came into force on 30 June.

Despite July’s gains, year-to-date vehicle output remains down 11.7%, with just under half a million units (489,238) produced so far in 2025. However, industry forecasts suggest production could rebound in the longer term. Independent analysis predicts UK light vehicle output could climb 6.4% to 803,000 units by 2026, supported by new government measures aimed at boosting competitiveness.

The government’s Industrial Strategy and the automotive-focused DRIVE35 programme are expected to play a key role in attracting investment, reducing energy costs, and addressing skills shortages across the sector.

Mike Hawes, SMMT Chief Executive, welcomed the continued growth in car production but warned that challenges remain:

“It remains a turbulent time for automotive manufacturing, with consumer confidence weak, trade flows volatile and massive investment in new technologies underway both here and abroad. Given this backdrop, another month of growing car output is good news – signalling the sector’s underlying resilience in the face of intense global competition. To unlock sustained growth, however, government strategies must become tangible actions as a thriving automotive sector can support well paid jobs and economic development across the UK.”