Volkswacht Bodensee - UK car sector fears for Trump tariffs as output falls

Factories producing mainly foreign-owned brands, including from Japanese giant Nissan and Indian-owned Jaguar Land Rover, turned out a total 905,233 vehicles, down 11.8 percent on 2023, said the Society of Motor Manufacturers and Traders.

"Multiple factors impacted car volumes, with the end of production for some long-running models as factories retooled for EVs, weakness in key global markets, and a slowdown in the transition to electrification amid tough economic conditions," SMMT added in a statement.

Output is forecast to decline further this year to 839,000 units before returning to above one million vehicles in 2028, it added.

"This is, however, dependent on global car and van market demand improving, positive economic conditions and greater consumer confidence -- and the delivery of the competitive conditions necessary to ensure zero-emission model launches stay on track," the SMMT noted.

Almost 80 percent of cars made in the UK last year were exported, mostly to the European Union, according to its data.

Production of battery electric, plug-in hybrid and hybrid vehicles together declined more than one fifth but still accounted for over one third of total UK output.

- Trump tariffs -

SMMT chief executive Mike Hawes expressed confidence in the outlook as long as the sector benefits from "industrial and trade strategies that deliver the competitive conditions essential for growth amidst an increasingly protectionist global environment".

"With new, exciting models and battery production on the horizon, the potential for growth is clear," he added.

The SMMT recently reported that the UK car industry sold a record number of all-electric vehicles in 2024 -- but still fell short of the Labour government's mandated targets.

Across the Atlantic, Trump wasted no time in taking aim at electric vehicles following his inauguration last week.

His executive order on "Unleashing American Energy" included steps to ensure a "level" playing field for gasoline-powered motors and halt federal funding to build new EV charging stations.

Hawes expressed concern over potential tariffs imposed on the car sector by Trump.

"We are concerned... about rising trade tensions and potential application of tariffs," he told journalists on the eve of the production report.

"What we are seeing is increasingly protectionist noises... In terms of the US, tariffs is Donald Trump's favourite word."

Hawes said the United States was "an important market" for luxury vehicles, such as UK-produced Bentley and Rolls-Royce cars.

While that allowed for "a greater opportunity to absorb any potential tariffs... we would hope to avoid any", he added.

J.Sauter--VB