British car production faces unprecedented decline amid industry changes
- Output at UK automotive assembly plants dropped significantly in 2024, in part due to the transition to electric vehicles.
- Sales to major markets declined sharply, further straining the car industry amid factory closures.
- The UK's car production is expected to continue facing challenges, indicating a need for strategic reforms.
In 2024, car production in the United Kingdom is forecasted to reach its lowest levels since 1954, with output at British automotive assembly plants plunging by nearly 12 percent. This decline has been largely attributed to factory closures and a significant slowdown in production as manufacturers transition towards electric vehicles. Major brands like Jaguar and Nissan have been retooling their plants, resulting in a drop to approximately 779,584 units produced, which is a 13.9 percent decrease compared to 2023. Sales to key markets, including the European Union and China, saw reductions of approximately 25 percent and 20 percent respectively, adding to the industry's struggles. The Society of Motor Manufacturers and Traders (SMMT) has indicated that the downturn is a temporary effect of retooling for battery electric vehicles (BEVs) and pointed out the importance of establishing a competitive trade environment to support growth. Investment in new battery production facilities, or gigafactories, is underway as UK manufacturers aim to meet future demands for electric vehicle production amid increasingly strict zero-emission vehicle mandates. However, the significant penalties imposed on car makers for failing to meet BEV sales quotas have created financial strains, leading to an unsustainable situation. With increased sales targets set for 2025, there are growing concerns about the future viability of traditional petrol and diesel vehicle sales and how this affects consumer pricing. The car industry in the UK is currently grappling with economic pressures stemming from Brexit, which has compounded the uncertainties regarding trade barriers and market access. The closure of manufacturing plants, such as the Vauxhall plant in Luton, alongside the challenges of transitioning to electric vehicles, has sparked calls for revisions to existing automotive policies. Therefore, the UK automotive sector is navigating through complex changes, with the hope that investment and strategic reforms can stabilize and reset the industry for future growth.