The United Kingdom’s car manufacturing sector is seeing a notable resurgence. The Society of Motor Manufacturers and Traders (SMMT) reports a significant surge in car production in October, marking the best October performance since 2019.
What Happened: The SMMT revealed that 91,512 units were produced in October, a 31.6% increase and the eighth monthly rise this year. This robust growth aligns with recent announcements of substantial inward investments into advanced automotive manufacturing. Both the government and industry combined have pledged approximately £4 billion ($5.8 billion) in November alone.
Domestic and foreign market car production grew by 23.9% and 33.4% respectively. Nevertheless, it was exports, accounting for 82.3% of total output, that primarily fuelled this rise. The European Union (EU), the U.K.’s most significant market, saw car shipments increase by a significant 58.5%.
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Production of battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) vehicles also grew, with a combined output hike of 52.1%. These environmentally friendly vehicles represented 40.1% of all cars produced in October, nearing a record high.
SMMT Chief Executive Mike Hawes commented on the growth, “These figures, coming on the back of a series of significant investment announcements, signpost a bright 2024 for the U.K. automotive sector.”
Hawes emphasized the collaborative efforts of the government and industry toward a greener future and the sector’s critical role in driving jobs, productivity, and economic growth.
The independent light vehicle production outlook has been revised upwards, predicting that U.K. vehicle manufacturers will produce 1,008 million cars and light vans in 2023, an 18.0% increase from the previous year.
However, this optimistic outlook is contingent on a favorable resolution to the impending EU-U.K. rules of origin requirements for batteries, set to tighten from Jan. 1, 2024. These rules could potentially impose tariffs on electric vehicles traded between the UK and EU, jeopardizing the production and sales of electric vehicles in both regions.
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