The number of cars produced in Britain has declined for an eighth consecutive month, mounting more pressure on the nation’s automotive industry following recent reports of factory closures and thousands of job losses.
UK plants made 15.3 per cent fewer cars last month than October 2023, new figures from the Society of Motor Manufacturers and Traders (SMMT) reveal this morning.
It means 2024 production is down 81,000 units with an output of 670,356 passenger models between January and the end of October (down from 751,422 last year). That’s a 10.8 per cent year-on-year slip.
The trade body says the decline is primarily due to a fall in export demand as global new car markets – particularly in Europe – have weakened. It also blamed the decline on factories scaling back assembly because they have been ‘retooling to enable production of the next generation of zero emission vehicles’.
Despite car makers upgrading their sites to build EVs they are unhappy about the Tory-introduced Zero Emission Vehicle (ZEV) mandate, which requires at least 22 per cent of all sales in 2024 to be electric. The threshold increases annually up to the ban on new petrol and diesel cars at the end of the decade.
Failure to adhere to the binding sales targets results in fines of up to £15,000 per car (and £9,000 per van in 2024, rising to £18,000 from 2025) below the ZEV requirement. The trade body revealed earlier this week that manufacturers are on course be stung with £1.8billion in penalties this year.
UK car production has declined for an eighth consecutive month as pressure continues to mount on the nation’s automotive sector amid reports of factory closures and job losses
SMMT boss Mike Hawes said it is ‘deeply concerning times for the automotive industry’ with these latest figures published in the wake of Vauxhall’s parent company, Stellantis, announcing plans to close its 120-year-old Luton factory where it produces vans and shed some 1,100 jobs. The manufacturer had previously warned it could pull out of the UK due to the Government’s over-ambitious EV sales targets.
Ford also recently announced intentions to axe 4,000 roles across Europe by the end of 2027, including roughly 800 jobs in the UK.
According to the SMMT’s latest statistics, the number of passenger cars produced for overseas markets is down 14.8 per cent in the first 10 months of 2024 versus last year – equivalent to 89,095 fewer cars being shipped abroad – though outputs for the home market is up 5.3 per cent.
Around a third of the cars made in Britain in October this year were battery electric, plug-in hybrid and hybrid electric, as the motor industry continues to mount pressure on the Labour Government to ease its ZEV sales targets.
Mike Hawes, SMMT chief executive, said: ‘These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure.
‘Slowdowns in the global market – especially for EVs – are impacting production output, with the situation in the UK particularly acute given we have arguably the toughest targets and most accelerated timeline but without the consumer incentives necessary to drive demand.
‘The cost of stimulating that demand and complying with those targets is huge and, as we are seeing, unsustainable.
‘Urgent action is therefore needed and we will work with Government on its rapid review of the regulation and the development of an ambitious and comprehensive industrial strategy to assure our competitiveness.’
Outputs in 2024 so far are down 81,000 units. UK factories have assembled 670,356 passenger models between January and the end of October, down from 751,422 last year – an 10.8% fall
The trade body says the decline is primarily due to a fall in export demand as global new car markets – particularly in Europe – have weakened
The decline in car manufacturing has also been attributed to factories scaling back assembly because they have been ‘retooling to enable production of the next generation of zero emission vehicles’
While UK passenger car production is down almost 11 per cent in 2024, outputs of vans and other commercial vehicles are at a 16-year high, despite a 3.9 per cent drop in year-on-year outputs in October.
However, with Vauxhall – which also produces electric commercial vehicles at its recently upgraded Ellesmere Port plant – set to close its Luton plant in April, van outputs will be significantly impacted by the decision from next year.
Hawes added: ‘Given recent announcements, ensuring the UK remains a globally competitive location for advanced vehicle manufacturing requires an industrial and trade strategy that works for the sector and, crucially, creates a healthy domestic market given vehicle makers build close to where they sell.
‘Government must work in partnership with industry to deliver market regulations that support consumers and industry, as well as measures to address the UK’s high cost of energy, and trade deals built on free and fair trade.’
Vauxhall owner Stellantis has outlined plans to close its vehicle plant in Luton in April, putting some 1,100 UK jobs at risk
The 120-year-old Luton factory currently produces vans. Stellantis says it will shift 100% of its commercial vehicle manufacturing to its recently-upgraded Ellesmere Port factory in the North West. Jobs for existing Luton staff will be made available there along with relocation support, bosses said
Jaguar will add to the fall in UK vehicle production having recently announced it will stop selling cars for 12 months
Jaguar bosses said it will undergo a year-long ‘sunset period’ of having no new cars on sale as part of a strategic plan to shift to EVs from 2026. It means production at its Castle Bromwich factory (pictured) and Solihull plant – both in the Midlands – will dramatically fall
Minsters, during the SMMT’s Annual Dinner on Tuesday, just hours after Stellantis said it could shut the Luton factory, have confirmed the Government will fast-track a consultation on adjustments to the ZEV mandate to help ease pressure on the sector.
However, Labour maintains steadfast that it will not delay the 2030 ban on sales of fossil fuel cars from the current 2030 deadline.
Car makers are said to have haemorrhaged £4billion this year alone in discounted EV prices as part of efforts to stimulate demand – and could be hit with anther £1.8 billion in fines for missing 2024 ZEV requirements.
The SMMT said on Thursday that it has ‘downgraded expectations for UK car and light van production’ in light of October’s statistics and a slower-than-expected uptake of EVs.
Jaguar’s decision to cease production of combustion engine cars at its Midlands factories in Castle Bromwich and Solihull as part of a ‘sunset period’ before becoming an exclusive EV car firm from 2026 will also weigh on sector output numbers.
British factories are now expected to turn out around 911,000 vehicles this year and 839,000 in 2025 – about a third less than the nearly 1.4million cars and light vans made in 2019 before the Covid pandemic, it forecast.
The trade body added: ‘Manufacturers announced more than £20billion worth of investment last year to drive their transition to EV production, a massive sum demonstrating the industry’s commitment to net zero.
‘If planned UK zero emission model launches stay on track and consumer demand improves, there is potential to get above one million units in 2028.
‘If not, output would remain below one million units until 2030, and in a worst-case scenario drop to fewer than 750,000 should plants close and others have reduced model line-ups, which would have a devastating effect on the sector, jobs and economic growth.’
It added: ‘Ensuring the UK remains a globally competitive location for advanced vehicle manufacturing, therefore, requires an industrial and trade strategy that works for the sector and, in addition, a healthy domestic market, given car makers build close to where they sell.
‘Government must work in partnership with industry to deliver market regulations that support consumers and industry, including measures to address the UK’s high cost of energy and the signing of trade deals built on free and fair trade.’
Ford chair Lisa Brankin (right), pictured here with former Tory transport minister Anthony Browne at Ford’s recently opened ‘Propulsion Development Laboratory’, has called on significant government support to boost EV sales and meet ZEV sales targets
The ZEV mandate forces car makers to sell an increasing volume of EVs between now and 2035. However, car makers have said the targets – and fines for not hitting them – are too harsh due to a lack of consumer demand for electric vehicles
Nissan, Britain’s biggest car maker, said last week that the ZEV Mandate ‘risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment’
Lisa Brankin, the chairman and managing director of Ford UK, called for the Government to urgently introduce ‘incentives’ such as tax breaks to convince drivers to switch away from petrol and diesel.
She said Ford has invested ‘significantly’ in the production and development of EVs, with ‘well over’ £350million invested around electrification in the UK, adding: ‘So we kind of need to make it work.’
Asked whether she is happy for the Government to stick to the targets around EVs and ending production of diesel and petrol cars as long as they help persuade customers to buy electric vehicles, Ms Brankin told BBC Radio 4’s Today: ‘Yes, I think so.’
But she added: ‘As an industry we have repeatedly said that we support the Government’s trajectory and we support the ambition that the Government has set out, it’s just that there isn’t customer demand.’
Nissan, Britain’s biggest car maker, said last week that the ZEV Mandate ‘risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment’.
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