Decline in UK Vehicle Production Amid Weak Export Demand

In January 2026, UK vehicle production experienced a significant decline of 13.6%, totaling 67,415 units, according to the Society of Motor Manufacturers and Traders (SMMT). This figure includes 65,249 cars and 2,166 commercial vehicles (CVs). Car production fell by 8.2% year-on-year, while CV output plummeted by 68.6%, marking its tenth consecutive monthly decline. The downturn was primarily attributed to weak export performance, particularly in key global markets.

CV production down 68.6% in January – the SMMTUK production slips in January, but EV rollout fuels optimism for reboundReutersUK car production falls 13.6% in January as exports slideUK van production plummets 69% following Vauxhall plant restructureVehicle production down in January amid weak global markets

Exports of UK-built vehicles faced substantial challenges, with car shipments decreasing by 10.1% to 51,396 units. The EU remained the largest market for UK car exports, accounting for 62.5%, while the US followed with a 14.1% share. However, shipments to other major markets, including Japan (2.7%), China (2.5%), and Turkey (2.4%), fell sharply. Notably, CV exports dropped by 75.0%, reflecting a broader trend of declining demand beyond Europe.

Vehicle production down in January amid weak global marketsUK production slips in January, but EV rollout fuels optimism for reboundCV production down 68.6% in January – the SMMTUK car production falls 13.6% in January as exports slideReutersUK van production plummets 69% following Vauxhall plant restructure

Despite the overall decline, domestic production for cars remained relatively stable, with a slight decrease of 0.6% to 13,880 units. This stability contrasts sharply with the significant drop in CV production for the home market, which fell by 58.4%. The SMMT noted that while exports typically account for a substantial portion of UK vehicle production, the domestic market's performance has been less volatile.

CV production down 68.6% in January – the SMMT

Looking ahead, the SMMT maintains a cautiously optimistic outlook, projecting that overall car production could rise by more than 10% to approximately 790,000 units by 2026. Combined car and light CV production is anticipated to reach 824,000 units, with the potential to approach one million by 2027, contingent on timely new model launches and favorable economic conditions. The production of battery electric vehicles (BEVs), plug-in hybrids (PHEVs), and hybrids (HEVs) also saw a decline of 10.6% to 26,854 units, yet these vehicles still represented 41.2% of total car output.

UK production slips in January, but EV rollout fuels optimism for reboundUK van production plummets 69% following Vauxhall plant restructureVehicle production down in January amid weak global marketsCV production down 68.6% in January – the SMMTUK car production falls 13.6% in January as exports slideReuters

Mike Hawes, CEO of the SMMT, emphasized the need for a proactive trade agenda to secure preferential access to markets, particularly in light of protectionist measures such as the "Made in Europe" proposals. He stated, “Weak exports to markets beyond Europe amid soft demand delivered a disappointing start to the year for UK vehicle manufacturing.” Hawes also highlighted the importance of competitive conditions for UK manufacturing, including lower energy costs and support for the supply chain.

UK production slips in January, but EV rollout fuels optimism for reboundCV production down 68.6% in January – the SMMTVehicle production down in January amid weak global marketsReutersUK car production falls 13.6% in January as exports slideUK van production plummets 69% following Vauxhall plant restructure

Critics have pointed out that the reliance on export markets exposes UK manufacturers to fluctuations in global demand, which can undermine stability in production. The SMMT's warnings about the need for stable trading relationships, especially with the EU and US, underscore the precarious position of the UK automotive sector amid evolving global trade dynamics.

UK production slips in January, but EV rollout fuels optimism for rebound

The decline in UK vehicle production in January 2026 reflects a complex interplay of weak export demand and ongoing challenges in the commercial vehicle sector. While the outlook for future production remains cautiously optimistic, the industry faces significant hurdles that require strategic responses to ensure competitiveness and growth in a changing global market.

UK car production falls 13.6% in January as exports slide