The car industry of the United Kingdom has entered one of the most challenging periods in its modern history, after recording a sharp and historic decline in production in 2025, according to official data.
The downturn reflects broader turbulence across Europe’s automotive sector, as manufacturers grapple with tighter environmental rules, the costly transition to electrification, and intensifying competition from Asia—particularly China, which continues to gain market share. At the same time, economic uncertainty has made consumers more cautious, curbing demand and slowing investment.
Historic Production Collapse
Within this environment, the UK emerged as one of the hardest-hit countries over the past year. In 2025, just 764,715 cars were produced—the lowest annual output in 73 years.
Production fell by roughly 150,000 vehicles compared with 2024 and dropped below pandemic levels, when approximately 920,000 vehicles were built in 2020 and 859,000 in 2021. The figure marks the worst performance since 1952, signalling a critical moment for British manufacturing.
Cyberattack and Trade Pressures
Among the main factors behind the slump was a large-scale cyberattack targeting Jaguar Land Rover, which forced the company to shut down key IT systems.
The disruption halted production for around six weeks, resulting in estimated losses of 20,000 vehicles and financial damage of approximately £1.5 billion.
Additional pressure came from trade relations with the United States, following tariffs imposed on imported vehicles by the Trump administration, which negatively affected British car exports.
Exports Still the Backbone
Despite the overall decline, exports remain the core pillar of the UK car industry.
- Europe accounts for 56.7% of exported vehicles
- The United States follows with 15%
- China absorbs 6.3%
- The domestic market represents just 23% of total sales
Cautious Optimism for Recovery
Despite the bleak outlook, industry figures express measured optimism for the coming years.
Particular importance is attached to the launch of the new generation of the Nissan Leaf at Nissan’s plant in Sunderland, a move seen as pivotal for strengthening electric vehicle production and domestic manufacturing capacity.
According to Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), UK car production could recover to up to one million vehicles annually from 2027—a level last reached in 2023.
Hawes noted that signs of stabilisation exist, provided the country proceeds with targeted interventions, including lowering energy costs, strengthening supply chains, and attracting new investment capital.
Source: carandmotor.gr