The UK car industry is at a tipping point – can it be saved?

The sector faces a long-term decline as output hits its lowest level in over 70 years

The UK car industry is at a tipping point – can it be saved?

The UK’s car industry is in a period of significant decline, with new car and van production hitting its lowest level in over seven decades. In the first half of 2025, just 417,000 new vehicles were built, a figure the SMMT’s chief executive, Mike Hawes, described as “depressing.” The total output for the year is expected to be around 755,000 vehicles, a number even lower than during the pandemic.

This decline is symbolised by recent factory closures, including Vauxhall’s Luton plant and Honda’s factory in Swindon. Experts warn that a continued loss of scale could cause the entire “ecosystem” to “fall apart,” impacting local economies and leading to a “brain drain” of skilled engineers.

Analysts point to several factors behind the decline, including uncertainty from Brexit and global supply chain disruptions caused by the pandemic. However, a deeper issue is that the UK has become an expensive place to manufacture vehicles, with labour and energy costs higher than in other European countries.

Despite the challenges, there is some optimism. Recent investments in gigafactories by companies like Nissan and Tata could see a potential recovery in output. The government has set a target of producing 1.3 million vehicles annually by 2035, though industry figures are circumspect about this goal.

An alternative path forward for the UK could be to focus on its high-end market, attracting investment from Chinese giants seeking a foothold in the European luxury sector. However, others believe the priority should be to support the manufacturers already present in the UK.

Source: BBC News

3 Comments

  1. Could this be a kick back from the British public being forced into buying electric cars.

    Reply
    • How is the public being forced to buy electric?

      Reply
  2. Highest electric prices in world for industry is crippling this country. Go back to producing proper high selling vehicles i.e Ford Fiesta, Stop importing steel from other parts of the world and produce our own. Mine our own coal and drill for our own oil.

    Reply

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