UK automotive sector grapples with trade challenges despite March gains

The UK’s automotive sector experienced a notable uptick in vehicle production in March 2025, with a 17.1% year-on-year increase, totalling 79,018 units. This surge was primarily driven by a 30.6% rise in export demand, particularly for electrified vehicles, which saw a 38.5% increase, now accounting for 45% of total car output. ​

Despite this positive development, the overall vehicle production for the first quarter of 2025 declined by 6.3% compared to the same period in 2024. This downturn is attributed to ongoing trade uncertainties, especially concerning potential new U.S. tariffs on foreign-made cars. ​

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), commented, “A March uplift to manufacturing is overdue good news, although the performance was boosted by a comparatively weaker month last year. Navigating the new era of trade uncertainty is now the major challenge.” ​

The U.S., being the second-largest importer of British-made cars after the European Union, plays a significant role in the UK’s automotive export market. The SMMT has urged for rapid trade negotiations to support jobs, demand, and growth on both sides of the Atlantic. ​

The UK’s automotive industry stands at a crossroads, balancing the promise of electrified vehicle growth against the backdrop of international trade uncertainties. Stakeholders emphasise the need for swift policy actions to ensure the sector’s resilience and continued contribution to the economy.

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