UK Car Production Crash: Shocking 76-Year Low in May Output Amid US Tariffs
Date: June 29, 2025 | Source: BBC Business & Industry Analysts
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UK car production has suffered a historic blow, dropping to its lowest May output level since 1949, according to data released by the Society of Motor Manufacturers and Traders (SMMT). The primary cause: a sharp decline in exports to the United States, which were halved due to the ongoing effects of tariffs implemented under former President Donald Trump.
Several UK-based car manufacturers, including Jaguar Land Rover and Mini, have significantly reduced or entirely halted exports to the US, citing unsustainable trade costs and supply chain disruptions.
Key Figures: The Collapse in Numbers
According to the SMMT, UK factories produced just 59,500 vehicles in May 2025 — a 52% drop compared to the same month last year. Exports to the US, which previously accounted for nearly 18% of total output, fell by more than half.
- 🔻 52% drop in total production year-over-year
- 🔻 57% decline in exports to the US
- 🔺 Slight increase in exports to the EU (+3.2%)
The SMMT warned that continued uncertainty over global trade policy, rising production costs, and weakening international demand could jeopardize the long-term future of British auto manufacturing.
Trump-Era Tariffs Still Felt
The lasting impact of tariffs imposed during Donald Trump’s presidency is still reverberating across global supply chains. While President Trump is no longer in office, several trade measures remain active due to failed renegotiations and congressional gridlock in Washington.
Many UK carmakers report that tariffs of up to 25% on certain vehicle categories — particularly electric and hybrid models — have made US exports economically nonviable. “We’ve been forced to redirect shipments toward the EU and Asia,” said a spokesperson for Jaguar Land Rover.
Manufacturers React: Production Pauses and Workforce Cuts
Several manufacturers, including Nissan and BMW (which owns Mini), have instituted short-term factory shutdowns and are reassessing long-term production commitments in the UK.
Sources within the industry confirm that approximately 2,500 jobs are at risk if export volumes do not recover by Q4 of 2025. Some firms are lobbying the UK government for temporary subsidies or tariff relief programs.
Government Response and Industry Support
UK Business Secretary Emma Thompson acknowledged the severity of the decline, stating that “the government is actively exploring ways to support the automotive sector, including trade renegotiation strategies and domestic investment incentives.”
The UK government recently announced a £350 million stimulus for electric vehicle manufacturing, part of a broader effort to shift focus from traditional combustion engines to cleaner technology. However, critics argue this does little to address immediate export losses.
Broader Economic Implications
Car manufacturing represents a key pillar of the UK economy, supporting over 800,000 jobs and contributing £67 billion to GDP annually. The ongoing production slump could have ripple effects on related industries such as parts suppliers, logistics providers, and energy firms.
The Bank of England has already flagged the auto sector as a “vulnerability zone” in its June economic outlook, warning that sustained contraction could impact regional employment and inward investment.
Read the full report on the Bank of England’s official site.
This dramatic drop highlights long-standing concerns within the broader UK manufacturing sector. For context, see our full coverage on UK Manufacturing Struggles Amid Global Trade Tensions.
Future Outlook: Can UK Auto Recover?
Despite the challenges, industry leaders remain cautiously optimistic. The UK remains a top innovator in high-performance and electric vehicle engineering, and trade with the EU remains relatively stable post-Brexit.
Analysts suggest a recovery may be possible in 2026 if new trade agreements are negotiated and global demand for green vehicles rebounds. However, the path forward will require agility, investment, and policy coordination.
For a detailed breakdown of electric vehicle policy in the UK, visit the UK EV Strategy 2025.
Conclusion
May 2025 will be remembered as a milestone for all the wrong reasons in British automotive history. The 76-year low in production underscores the fragility of global supply chains and the long shadow of trade policies.
Whether the UK auto industry rebounds will depend on how quickly both the government and manufacturers can pivot to new strategies, technologies, and markets. In the meantime, thousands of workers and multiple communities wait anxiously for signs of revival.
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