UK vehicle production fell 7.5 percent in the first half of 2026, with factories building 385,979 cars and commercial vehicles.
Output stabilized in the second quarter, dropping only 128 units, or 0.1 percent, year on year as exports strengthened and production returned to marginal growth.
Export production reached 294,222 units over six months, a 5.6 percent decline from the same period last year, while domestic output fell 13.2 percent to 91,757 units.
In the second quarter, exports increased by 5,075 units, a 3.9 percent rise.
Car exports grew 4.5 percent in June for the third consecutive month, whereas commercial vehicle exports surged 54.3 percent, largely driven by a weak base.
Total June output eased 1.2 percent to 68,200 units after a rise in May.
Exports accounted for 76.2 percent of all vehicles built to date, highlighting the sector’s reliance on global markets.
The European Union remained the largest customer, receiving 58.3 percent of car shipments, up 3.4 percent to 166,801 units. The United States followed with 15.8 percent of exports, while China took 12,323 units, down 44.7 percent compared to the first half of 2025.
Electrified vehicles made up roughly 40 percent of production, yet output was 8.6 percent below last year due to model changes.
Independent forecasts suggest UK car and light vehicle output will remain flat at around 740,000 units this year, with a potential return to growth in 2027 if new model investment increases.
A million-unit output would require a 40 percent increase in production and enhanced competitiveness for manufacturing.
Energy price volatility and high industrial electricity costs are identified as key barriers, with a forthcoming scheme aimed at reducing costs for eligible manufacturers.
Reform of the zero‑emission vehicle mandate is considered essential, as current regulation outpaces demand and raises selling costs.
Trade complications, including origin rules under the UK‑EU agreement, threaten cross‑Channel supply chains and could impact an annual €80 billion trade relationship.
Industry leaders argue that urgent action on energy costs, regulatory reform, and improved trade arrangements would enable the sector to recover, benefiting employment across the United Kingdom.
Automotive manufacturing contributes more than £85 billion in turnover, £18 billion in gross value added, and 188,000 jobs. The broader sector, including retail and service, is valued at nearly £400 billion, supports 830,000 jobs, and accounts for 10 percent of UK goods exports.
A domestic sourcing opportunity of £4.6 billion is projected by 2030.
