UK car making dips but on track for 50% EV output by 2028

UK car production dipped by nearly 8% in the first half of 2024 as the country’s biggest manufacturers refreshed crucial model lines and invested in electrification. New figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that the UK built 416,074 cars in the six months to July – 34,094 fewer (7.6%) than in the same period last year. The decline was particularly sharp in June, when output dropped by 26.6%. However, the SMMT highlights that this decline was “expected as manufacturers retool lines to make electrified models following some £23.7 billion of UK investment announced last year”. Key UK-built cars, including the Mini Cooper, Nissan Qashqai and Nissan Juke, have been refreshed in recent months - a process that necessitates some degree of factory downtime for retooling, staff training and homologation. JLR also ended production of three of its UK-built Jaguars – the XE, XF and F-Type – in Castle Bromwich, production of the second-generation Nissan Leaf came to an end in Sunderland, and there was a lull at Aston Martin as the new DBX and Vantage came on stream. Having reevaluated its 2024 forecast in light of the latest dip, the SMMT now estimates that the UK will produce around 910,000 cars this year, down 9.3% on 2023 - which, it says, “illustrates how the EV transition is impacting UK light vehicle production”. Output will head back up towards 1.1 million units in 2028, the SMMT says, when half of all cars and vans produced in the UK will be electric. By then, Mini will be building the electric Cooper and Aceman at Cowley, Nissan will have three EVs on the line at Sunderland, Jaguar production at Solihull will be all-electric and Land Rover will have at least four EVs spread across Solihull and Halewood. Meanwhile, lower-volume luxury marques such as Aston Martin, Bentley and possibly McLaren will have started building their debut zero-emission offerings. Questions remain over exactly when Toyota plans to introduce an electric car to its plant in Burnaston, Derbyshire - one of the UK’s busiest – but the hybrid-powered Corolla that’s currently built there will no longer be able to be sold in the UK after Labour’s proposed ban on combustion sales in 2030. The SMMT says that with “the right political, industrial and economic conditions” – by which it means the incentivisation of private EV sales, stable trade agreements with key export markets and support for local manufacturers – the UK could build more than nine million zero-emission ‘light vehicles’ by 2035. That would be 600,000 more than is currently forecasted and would amount to revenue generation of £290 million, the SMMT estimates. The drop in output over the past six months was not matched by a decline in revenues, because the absence of certain volume models was compensated for by the success of some of the UK’s most expensive premium cars. The cars produced from January to June had a value of £17.5bn, which is up from £17.3bn in the first half of 2023. “So we’ve made less, but the value of what we have made has increased,” said SMMT chief executive Mike Hawes, citing the popular Range Rover and Range Rover Sport as particularly strong contributions to that increase in value. To sustain that level of revenue generation, Hawes said it is particularly important that the UK cements productive trade agreements with its key international markets, the country’s automotive output being roughly 80% for export. The EU, for example, remains the UK’s biggest car market, and shipments to the US rose by 40%, while the Chinese market accounted for 16% of all sales - emphasising the value of the UK’s output to regions with a particularly strong luxury car market. Hawes hailed recent deals struck with Japan, Australia and New Zealand as steps towards protecting the revenue stream from exports and was optimistic that the UK will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) later this year, as well as signing a similar trade agreement with South Korea. Negotiations over a trade deal with Canada, though, have been suspended. That means UK-built cars could be slapped with a 6% import tariff in that market, where cars over $100,000 are already subject to a significant luxury goods tax. Hawes said he "would like to see" the talks recover.