UK car production off to slow start in 2026 as exports decline

It was a slow start to the year for UK car manufacturers, as output dropped more than 8% in January off the back of weak export demand. New figures released today by the Society of Motor Manufacturers and Traders (SMMT) show that just 65,249 cars were built in UK factories last month, down from 71,104 in January 2025. The industry body blamed the "disappointing" downturn on a decline in exports, with 10.1% fewer cars shipped outside of the UK. That's a substantial percentage given that the vast majority of cars built here – 77.8% in January – are for overseas markets. The SMMT said the impact of slow export demand on the UK industry lays bare the importance of "stability in global trading conditions". The industry body called for regulators to preserve stable relationships with key markets – particularly the EU and US, which take 62.5% and 14.1% of all exported cars respectively – as a means of securing further growth in the automotive sector, as the threat of tariffs and rules of origin threaten to severely disrupt the UK automotive business model. Meanwhile, SMMT chief executive Mike Hawes pointed to the drop in exports as a signal of the importance of barrier-free trade with the EU. He said: “Weak exports to markets beyond Europe amid soft demand delivered a disappointing start to the year for UK vehicle manufacturing. It reinforces the need for a forward-looking trade agenda that secures existing preferential access – notably with the biggest market on our doorstep, given protectionist ‘Made in Europe’ proposals – and builds new ones with markets worldwide. "That must be combined with more competitive conditions for UK manufacturing – lower energy costs, a strong and sustainable domestic market, and specific support for our supply chain.” The decline comes in the context of a 13.6% downturn in overall vehicle production last month, which was driven in part by a steep, 58.4% fall in commercial vehicle output to just 2166 units - a result of Stellantis shutting its van factory in Luton last year. Despite the downturn in January, the SMMT forecasts that overall car production in 2026 will actually rise by 10% as a result of the new Nissan Leaf going into full-scale production in Sunderland, as well as another seven new EVs planned to start running down UK factory lines, including the Range Rover Electric and Bentley's new Urban SUV.

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UK car production off to slow start in 2026 as exports decline

Output down more than 8% as fewer cars built for overseas markets

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