UK Car Output Hits 76-Year Low

QuinnlynBusiness2025-06-295220

UK car production plunged to its lowest level since 1949 last month, as Aston Martin and other British carmakers halted exports to the United States amid president Donald Trump’s escalating trade war.

Data released on Friday by the Society of Motor Manufacturers and Traders (SMMT) found that UK factories turned out just 49,810 cars and vans in the month of May, down 33 per cent on the year and the worst monthly performance in 76 years, outside the COVID-19 shutdowns of 2020.

The collapse comes after Trump imposed steep tariffs on foreign-made cars, prompting British firms like Aston Martin and Jaguar Land Rover to suspend US-bound shipments from April.

Exports to the US fell by 55 per cent in May, slashing the American market’s share of UK automotive exports from 18 per cent to just 11 per cent.

Exports to the EU, meanwhile, dropped 22.5 per cent.

The trade standstill could ease next week, however, when a new UK-US trade deal comes into force.

Under the agreement, the US will reduce its automotive import tariff from 27.5 per cent down to 10 per cent of the first 100,000 UK-made vehicles shipped annually.

The deal, announced by Trump on 16 June during the G7 summit in Canada, follows weeks of turbulence triggered by his so-called ‘liberation day’ tariffs blitz, which raised levies across steel, car and aluminium imports from US trading partners.

Aston Martin in the spotlight

Aston Martin, which had slashed exports to the US at the end of April in response to tariff chaos, saw its shares plunge from 119p to below 60p during the height of the fallout.

Although the FTSE 250 stock rallied nearly 13 per cent on the day the deal was announced, it has since remained stuck in a rut, closing at 70p on Wednesday.

The carmaker’s chief executive, Adrian Hallmark, said the firm was now scrambling to capitalise on the new trade window.

He said: “It comes live on the 30th June… so we’re planning to invoice three months’ worth of sales in a 24-hour period.”

Still, Hallmark welcomed the deal, noting that British carmakers were now “less worse off than some of (their) European and non-European competitors”.

Wider industry pressures

Mike Hawes, chief executive of the SMMT, acknowledged the damage inflicted by the tariff war: “While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future”.

He remained optimistic, pointing to the trade truce and the UK’s new industrial strategy, which promises to cut energy costs for manufacturers by up to 25 per cent.

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Even before the tariff flare-up, Britain’s carmakers were facing growing pressures.

The government’s zero-emission vehicle (ZEV) mandate, which compels manufacturers to hit rising EV sales targets, has triggered structural changes across the sector.

Stellantis last year cited the cost of ZEV compliance in its decision to close its Luton factory and consolidate products at Ellesmere Port.

Ford, meanwhile, cut 800 UK jobs as part of a broader European retrenchment.

Cyril Aboujaoude, co-founder of private equity firm Tioopo Capital, said: “This deal has the potential to mark a positive shift in the UK-US industrial trade, but its long-term value will depend on more than short-term quota relief.”

He added: “Long term visibility is essential – not just for the major auto manufacturers, but for the mid-sixed, high spec engineering firms that represent the future of UK innovation”.

By City AM

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