Britain braces itself for another dismal year of declining car production
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Production is expected to drop to around 775,000 in 2025, which would be in line with the number of cars manufactured in 2022.
PHOTO: REUTERS
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LONDON – Automakers produced fewer cars in Britain in 2024, and output is poised to fall again in 2025 – potentially to the lowest in more than 70 years.
Nissan Motor, Tata Motors’ Jaguar Land Rover and a handful of other manufacturers made just shy of 780,000 cars in Britain in 2024, down 14 per cent from 2023, the Society of Motor Manufacturers and Traders (SMMT) said on Jan 30.
Production is expected to drop to around 775,000 in 2025, which would be in line with the number of cars manufactured in 2022. If the industry comes up short of that total, however, output will have slumped to the lowest since 1954.
“The level of demand isn’t there,” Mr Mike Hawes, chief executive of SMMT, told reporters on Jan 29.
He welcomed Chancellor of the Exchequer Rachel Reeves’ focus on economic growth, saying that the industry needs the government to boost confidence and encourage consumers to consider buying new vehicles.
The SMMT has been pressing Westminster to offer more support for electric-vehicle purchases, in particular.
While sales rose to a record in 2023, leading Britain to overtake Germany as Europe’s top electric vehicle (EV) market, the increase was driven by demand from businesses and fleet buyers that are eligible for tax incentives. The government phased out a plug-in car grant for private car purchasers in 2022.
Mr Hawes reiterated that the amount of discounting automakers had to do to boost EV sales in 2024 – estimated at around £4.5 billion (S$7.56 billion) – is unsustainable.
“The industry, like government, doesn’t have a magic money tree,” he said. “It can’t keep shaking it, to expect that it will just continue to effectively subsidize demand.”
The outlook for car production in 2025 is tempered by Jaguar Land Rover – Britain’s No. 2 producer, after Nissan – taking an unconventional approach to repositioning its Jaguar brand.
The marque is going dormant until 2026, when it plans to re-emerge selling only higher-end EVs.
Jaguar’s production halt takes “a big chunk” out of projections for how many cars will be made in Britain in 2025, Mr Hawes said, noting that other manufacturers similarly are retooling plants to make EVs.
“That will come back in the end,” he added. “But it’s a question of when, and how quickly.” BLOOMBERG
