Production pressure remains, but foundations for growth in place

January’s production figures outline the pressing challenges faced by UK vehicle manufacturing in 2026. Weaker export demand beyond Europe, and a sharp contraction in commercial vehicle production following major restructuring, have all impacted output. That said, the sector continues to depend on overseas markets – with more than three quarters of output made for export – reinforcing the importance of stable, competitive and forward looking trade relationships.

Encouragingly, the medium term outlook remains positive. While production of electrified vehicles fell -10.2%, they still accounted for two in five vehicles rolling off factory lines last month, and volumes are expected to rise as next generation EV manufacturing ramps up in Sunderland. This development is also supported by a wave of new model launches planned for the year ahead. Turning this potential into sustained growth will require globally competitive conditions for automotive manufacturing, including affordable energy, strong domestic demand and targeted support for the supply chain, which must be backed by the swift and effective delivery of government industrial and trade strategies.

Against this backdrop, SMMT Electrified will play a vital role in bringing together industry, policymakers and the wider industry to focus the ways in which the UK can support and accelerate the transition to zero emission mobility while remaining internationally competitive. Taking place on 12 March, the event will look towards the steps needed to scale EV production, strengthen charging and grid infrastructure, secure battery supply chains and unlock investment – all vital for delivering ambitious decarbonisation plans. We are delighted to announce that Professor Sir Jim Skea, Chair, Intergovernmental Panel on Climate Change (IPCC), has been confirmed as a keynote speaker, and will be joined by a variety of industry experts. Tickets are almost sold out  – secure yours before it is too late.

Equally critical to the sector’s long term success is ensuring it attracts, retains and develops the broadest possible talent base. SMMT’s International Women’s Day event is an opportunity to celebrate the women working across automotive, from manufacturing and engineering to retail, policy and leadership. The event, held on 5 March, will look at ways in which the sector can better support progression, widen opportunity and create workplaces where talent can thrive at every level. As the industry undergoes rapid change, building a more inclusive workforce is essential in attracting talent and ensuring automotive remains a dynamic career choice for the next generation.