UK vehicle production falls 7.5% in first half of 2026 as exports help steady manufacturing
UK vehicle production has seen fewer cars and commercial vehicles produced during the first six months of 2026, although improving export demand helped stabilise production as the second quarter progressed.
New figures released by the Society of Motor Manufacturers and Traders (SMMT) show UK factories built 385,979 vehicles between January and June, representing a 7.5% decline compared with the same period in 2025.
While the overall first-half figures remain below last year’s levels, manufacturers experienced a more stable second quarter. Vehicle output was virtually unchanged year-on-year during the three-month period, suggesting production is beginning to recover after a difficult start to the year.
Exports continued to underpin the industry despite softer overall volumes.
A total of 294,222 vehicles were built for overseas markets during the first half of the year, down 5.6% compared with the same period last year. Domestic production declined more sharply, falling 13.2% to 91,757 vehicles.
During the second quarter, however, export performance improved, with overseas shipments increasing by 3.9% compared with the same period in 2025.
June also provided encouraging signs. Total vehicle production eased by only 1.2% to 68,200 units, while car exports recorded a third consecutive month of growth. Commercial vehicle exports rose sharply by 54.3%, although from a comparatively low base.
Exports now account for more than three quarters of all vehicles manufactured in the UK, highlighting the industry’s dependence on international markets.
The European Union remained the UK’s largest export destination, receiving 166,801 cars during the first half of the year. That represented 58.3% of all UK car exports and marked an increase compared with the previous year.
The United States remained the second-largest overseas market, taking 45,162 vehicles despite a 4.6% decline in export volumes. Shipments to China fell significantly, with exports dropping 44.7% year-on-year to 12,323 vehicles.
Manufacturers continue to face disruption as several companies introduce new vehicle models and adjust production lines, particularly for electrified vehicles.
Although battery electric, plug-in hybrid and hybrid models accounted for roughly four out of every 10 cars produced during the first half of 2026, output of electrified vehicles remained 8.6% lower than a year earlier as model transitions continued across the industry.
Independent forecasts cited by the SMMT suggest overall UK car and light vehicle production is expected to remain broadly unchanged during 2026 at around 740,000 units before returning to growth in 2027.
The industry organisation argues that significantly higher production remains achievable if manufacturers secure additional investment in future vehicle programmes and the UK strengthens its competitiveness as a manufacturing location.
Among the priorities identified are lower industrial electricity costs, implementation of the government’s Modern Industrial Strategy, reforms to the Zero Emission Vehicle (ZEV) Mandate, and continued tariff-free trade with European markets.
The SMMT also warned that unresolved “Made in Europe” requirements and Rules of Origin arrangements under the UK-EU Trade and Cooperation Agreement could create further pressure on automotive supply chains and investment decisions.
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