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Production fell by 11.6%, the SMMT said today (27 August), with a 10.6% decline in car production for a total of 61,767 built. A 9.3% rise in output for UK buyers failed to offset a 15.8% fall in exports, with levels to China down 36.9%, Japan 24.4%, Turkey 18.5%, the US 17.7% and the EU 15.2%.
There was more positive news for electric vehicle (EV) production, with output of fully electric and hybrid models recording the first monthly increase of the year, up 6.8% to 25,678 units. Electrified models accounted for more than four in 10 cars built in July, up from about three in 10 one year ago.
In the year to date, UK factories have turned out just under 450,000 cars and commercial vehicles, down 8.1% on the same period in 2025, which the SMMT said reflected model changeovers, the closure of a plant last year and continued trade and investment uncertainty.
“Output could still reach 1 million units by the turn of the decade, but only if the UK addresses its competitiveness and secures fresh model investment. Government’s recently launched ZEV [Zero Emission Vehicle] Mandate review is welcome, providing an opportunity to make meaningful reforms to the regulation that, with stronger market enablers, would help reduce the high cost of selling EVs in the UK, which is currently a major deterrent for global investors,” the SMMT announcement said.
The organisation also called for structural reform of industrial energy costs, which it said would remain roughly 60% higher than Europe’s despite the forthcoming British Industrial Competitiveness Scheme.
“At the same time, government must address the double threat to UK-EU automotive trade posed by the European Commission’s ‘Made in the EU’ proposals, which could make UK-produced vehicles uncompetitive in European markets, as well as the tougher rules of origin requirements under the EU-UK TCA [Trade and Cooperation Agreement] – the Brexit deal – which come into force in January. Unless urgent action is taken by both sides, there is a serious risk to cross-Channel auto supply chains and an €80bn-a-year trading relationship,” the announcement said.
Mike Hawes, SMMT chief executive, said: “July’s figures underline the intense pressure under which UK vehicle manufacturers are currently operating. Although the negative performance is exacerbated by shutdown calendarisation and model changeovers, it is being compounded by weaker overseas demand and fierce global competition.
“The rise in electrified vehicle production is encouraging, but long-term success depends on making the UK a more competitive place to make and sell vehicles. Meaningful and urgent reform of the ZEV Mandate, reduction of the UK’s sky-high energy costs and negotiations to safeguard free and fair trade with our largest and closest export market are essential to put UK automotive manufacturing back on a path to growth.”
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