The UK car industry just had an absolute shocker. May 2025 saw the worst production numbers for any May since 1949, not counting the Covid years, thanks in large part to fresh US tariffs on cars built outside America.
According to new data from the Society of Motor Manufacturers and Traders (SMMT), car and van production in the UK dropped by 32.8 percent last month. That’s five months in a row of falling output, and only 49,810 vehicles rolled off the lines, a record low for a ‘normal’ May in 76 years.
So, what’s going on?
Back in April, Donald Trump threw a curveball by announcing 25 percent tariffs on imported cars, triggering chaos across global supply chains. Big UK brands like Jaguar Land Rover, Aston Martin, and Lotus quickly slammed the brakes on US-bound shipments.
Now for the (slightly) better news. A last-minute trade deal between the UK and US means British-built cars will instead face a 10 percent tariff, starting Monday. So those paused deliveries are back on, but this lower tariff only covers the first 100,000 vehicles. Anything above that still gets hit with the full 25 percent charge.
Exports take a beating
Because most UK-built cars are sold abroad, the new tariffs hit hard. Total exports dropped 27.8 percent, with US-bound vehicles falling off a cliff, down 55.4 percent compared to last year. Only 11.3 percent of UK-made cars went to the US in May, down from 18.2 percent.
Exports to the EU weren’t much better, falling 22.5 percent. All told, production is down 13.9 percent so far this year compared to 2024, totalling just 384,226 units.
Even commercial vehicles, like vans and trucks, took a big hit, with output down 53.6 percent. Exports in that segment fell by more than a third.
But there’s a light at the end of the tunnel
Three major trade deals with the US, EU, and India have now been locked in, and the government has just launched new Industrial and Trade Strategies aimed at boosting the sector.
The SMMT is optimistic. It says if the government can tackle high energy costs and help manufacturers sell more both at home and overseas, the UK could return to the world’s top 15 car-making nations, a spot we haven’t held since 2018.
Mike Hawes, the SMMT’s chief exec, said: “It’s not as good as the 2.5 per cent we had – but it’s a damn site better than 27.5 per cent."
So while 2025 has been rough so far for UK car production, some smart trade moves and a bit of government support could steer things back on track.
