In a sharp blow to the British automotive industry, UK vehicle production slumped to its lowest level for the month of May since 1949, excluding the disrupted pandemic years. This dramatic drop is largely attributed to the steep 25% tariffs imposed by the United States on UK-made vehicles. As a result, exports were hit hard, plummeting by 27.8% in May 2025 compared to the same period last year.
According to data from the Society of Motor Manufacturers and Traders (SMMT), the UK produced just 49,810 vehicles in May—down from over 70,000 a year ago. Passenger car output dropped 31.5% to 47,723 units, while commercial vehicle production suffered a 53.6% decline to 2,087 units. The once-strong American market saw a drastic shift: shipments to the US more than halved, with America’s share of UK car exports falling from 18% to just 11%.
The root cause lies in the trade tensions and the uncertainty created by the threat of long-term tariffs. Many manufacturers, including iconic British brands such as Jaguar Land Rover and Aston Martin Lagonda, temporarily suspended exports to the US, opting to avoid paying the high levies. Some plants, like Stellantis’ factory in Luton, paused production entirely to retool for future electric vehicle (EV) lines, further reducing overall output.
This marks the fifth consecutive month of declining vehicle output in the UK, putting intense pressure on a sector already navigating complex challenges like the EV transition, post-Brexit logistics, and global component shortages.
However, not all is bleak. A recent breakthrough in trade talks between the UK and the US may signal a turning point. Under the new agreement, effective from late June 2025, the US will impose a reduced 10% tariff on the first 100,000 UK-built vehicles exported annually. This move has already encouraged manufacturers to resume their exports, with some shipments bound for American dealerships already in motion.
Industry experts see this as a cautiously optimistic step. While the new trade terms won’t reverse the recent slump overnight, they could help stabilize operations in the second half of the year. For now, automakers are calling for stronger government support, clearer EV policies, and streamlined trade negotiations to secure the future of Britain’s critical auto industry.
If these issues are addressed effectively, the UK’s car manufacturing sector may rebound in time to meet growing global demand for electric and low-emission vehicles.
Reporter
