UK vehicle output falls 8.2% in March

UK vehicle production declined in March, highlighting ongoing pressures on the automotive sector despite signs of stabilisation in car manufacturing, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

A total of 72,511 vehicles were produced during the month, down 8.2% year on year. While car output remained relatively steady – falling just 0.8% to 69,755 units – commercial vehicle (CV) production dropped sharply by 68.3% to 2,756 units.

The decline reflects a combination of factors, including supply chain disruptions, weaker exports to key global markets, and ongoing restructuring by major CV manufacturers.

Exports of both cars and commercial vehicles fell overall, with car shipments down 4.3% and CV exports dropping 54.0%. Nevertheless, overseas markets still accounted for more than 70% of total UK production.

The EU remained the UK’s largest export destination, taking 62.6% of car exports and more than 90% of CV shipments. Demand from Europe continued to strengthen, with car exports to the region rising 4.8%, marking a fourth consecutive month of growth.

However, this was offset by significant declines in shipments to other major markets, including the United States (-24.1%), China (-47.9%) and Japan (-25.3%).

Domestically, car production for UK buyers increased by 8.7%, while CV output for the home market fell sharply by 77.9%.

In the first quarter of 2026, UK factories produced 208,088 vehicles, a 13.0% drop compared to the same period last year. Car output fell 6.7%, while CV production plunged 70.0%, largely due to the closure of a major plant in 2025.

Exports accounted for 75.8% of production in the quarter, although overall shipments declined by 12.4%, with domestic production also down 14.8%.

Amid mounting global challenges, including energy price volatility linked to Middle East tensions and potential tariff risks, industry leaders are urging policymakers to act swiftly to protect the UK’s competitiveness.

The SMMT has called for urgent amendments to proposed EU legislation, including the Industrial Accelerator Act and “Made in Europe” policy, warning that current proposals could disadvantage UK manufacturers by excluding them from key parts of the European market.

With EU-UK automotive trade valued at around €80 billion annually, the industry is pressing for the UK to be recognised as a trusted partner to preserve supply chain integration and market access.

Mike Hawes, SMMT Chief Executive, said: “Car production stabilising in March is welcome news for both assembly and the wider supply chain.

“Government’s recent intervention to bring down electricity costs will provide a major boost, but the benefits must be delivered urgently as the geopolitical situation offers little optimism.”

He added that closer cooperation between the UK and EU will be essential to avoid disruption from potential tariffs and stricter rules of origin on electric vehicles.

John Cassidy of Close Brothers Motor Finance warned that the latest figures reflect growing uncertainty across the sector.

“The conflict in the Middle East, the threat of further tariffs and concerns that the UK could be omitted from the EU’s ‘Made in Europe’ agenda are presenting additional headaches for manufacturers,” he said.

Cassidy added that alongside geopolitical risks, manufacturers are also navigating regulatory pressures such as the Zero Emission Vehicle (ZEV) mandate, increasing the urgency for government support.