In May 2025, UK auto production fell sharply, marking the lowest output for a May since 1949—excluding pandemic-related drops. Just 49,810 vehicles were built, representing a 32.8% decline year-over-year. This slump reflects broader challenges in the industry.
🚗 Impact of U.S. Tariffs
The steep drop was largely triggered by new U.S. tariffs introduced under the Trump administration, which imposed a 25% levy on imported cars and parts starting in March. The sudden cost increase severely disrupted supply chains and exports to two of the UK’s largest markets, the U.S. and EU.
- Exports to the U.S. in May plunged by more than 55%.
- Overall EU exports also fell by over 22%.
Other Contributing Factors
- Factory Disruptions: The industry experienced manufacturing pauses due to realigning production with tariff-sensitive export strategies.
- Model Changeovers: Shifts in manufacturing schedules to support new electric vehicle lines further slowed output.
- Holiday Effects: A late Easter break reduced working days in April, adding to the decline.
Industry Response & Outlook
- Short-Term Relief: A new U.S.–UK trade deal allows up to 100,000 UK-made cars to enter the U.S. with a reduced 10% tariff—down from the full 25%—offering some relief.
- Restructuring in Progress: Automakers like Jaguar Land Rover have halted shipments to assess pricing strategies, while companies such as Chinese-owned Lotus are reportedly considering relocating production to the U.S. to avoid tariff impacts.
- Government Action Urged: Industry leaders and analysts are calling for a detailed industrial strategy to strengthen the UK’s global competitiveness, particularly in EV production, infrastructure, and workforce training.
Bottom Line
UK auto manufacturing is facing a historic downturn driven by U.S. trade policy and ongoing industrial transitions. While the new trade agreement provides some short-term cushioning, the sector is in urgent need of a robust domestic policy framework to secure its long-term future.
