Overview
- The Society of Motor Manufacturers and Traders (SMMT) reported a 2.7% rise in May vehicle production to 51,178 units, ending four months of decline with car output up 3.2% and commercial vehicle output down 7.6%.
- Shipments to the United States jumped 83.1% to 7,733 units in May while exports to the EU and China fell 5.2% and 14.3% respectively, a shift linked to the June 2025 UK‑US trade deal and likely tariff timing effects.
- Total production for January–May 2026 is about 8.7% lower year‑on‑year at 317,779 units, underlining that the May bounce has not erased the sector’s deeper, sustained weakness.
- The SMMT said weak underlying demand for electric vehicles, rising compliance and industrial energy costs, and looming 2027 rules of origin risk could undermine competitiveness, jobs and future investment and called for lower industrial costs, continued open trade with the EU, and a ZEV mandate aligned with market reality.
- Manufacturers face heavy spending to shift to electric models while facing stronger competition from lower‑cost Chinese EVs and forecasts that 2026 output will remain below pre‑pandemic levels, making government policy on trade and costs the key factor to watch next.