Output slumps in October but SMMT says recovery is coming | Market insight - AM

Production fell by almost a third in October as the sector continued to feel the impact of the JLR cyber attack and reshuffles in commercial vehicle manufacturing - but new forecasts point to growth returning from 2026.

According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), total vehicle output dropped -30.9% last month, with 62,116 cars and commercial vehicles leaving UK factories.

Car production fell -23.8% year-on-year to 59,010 units, 18,474 fewer than in October 2024, as JLR began a phased restart of operations following a cyber attack that forced a halt in output .

Despite the overall decline, electrified models continued to gain ground. Almost half (46.2%) of all cars built in October were battery electric, plug-in hybrid or hybrid, with volumes of these vehicles rising 10.4% to 27,287 units.

Production for the market slipped -10.6% to 13,785 cars, while export output fell -27.1% to 45,225 units.

Exports accounted for more than three-quarters of total car production, with the EU, US, Turkey, China and Japan remaining the UK’s top five overseas destinations. Shipments to the EU, US and Japan declined, while volumes to Turkey and China increased.

Commercial vehicle (CV) output endured a much steeper fall, down -74.9% to 3,106 units - the seventh consecutive monthly decline.

The SMMT said this reflects the ongoing impact of a major manufacturer consolidating operations into the North West, which has significantly affected volumes.

Taken together, car and van output in October was down -30.9%, reinforcing what has been a tough year for UK factories. So far in 2025, manufacturers have produced 644,366 cars and vans, a -17.0% decline on the same period in 2024.

The latest figures come just days after the Chancellor’s Autumn Budget, which included a further £1.5 billion in automotive transformation funding and a decision to defer plans to end critical employee car ownership schemes into the parliament – a move the industry had warned could otherwise cost around £1 billion a year and put up to 5,000 jobs at risk.

Government has also launched a consultation on its proposed British Industrial Competitiveness Scheme (BICS), which is intended to cut high energy costs for manufacturers and strengthen the UK’s appeal for new automotive investment.

On the demand side, the Budget delivered a £1.3 billion top-up to the Electric Car Grant and changes to the Vehicle Excise Duty (VED) expensive car supplement, reducing the number of electric cars that will face the higher rate.

However, the SMMT warned that the introduction of a new pay-per-mile EV tax (eVED) risks undermining those positive measures by dampening consumer appetite for electric vehicles just as manufacturers are being pushed to ramp up sales to meet net-zero and Zero Emission Vehicle (ZEV) mandate targets.

Despite the current downturn, the latest independent production outlook suggests the worst may soon be over.

The forecast expects UK vehicle output to rise in 2026, with 828,000 cars and vans projected to be built year, driven largely by new electric models coming on stream.

With the right policy environment and continued investment, SMMT said annual production could climb towards 1 million units by the end of the decade - still short of the government’s Industrial Strategy ambition to boost volume to 1.3 million vehicles by 2035.

Mike Hawes, SMMT chief executive, said: “Another difficult month for UK vehicle production as the impact of the earlier cyber attack continued to be felt. Growth is on the horizon, however, and Government has recognised the automotive industry as a pillar of national strategic importance, backing it with an industrial strategy and additional £1.5 billion to drive manufacturing competitiveness.

“Investment competitiveness also depends on a healthy domestic market, however, notably for EVs, and introducing a new electric Vehicle Excise Duty is the wrong measure at the wrong time. This new tax will undermine demand, so government must work with industry to reduce the cost of compliance and protect the UK’s investment appeal.”

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AM deputy editor Aimée Turner has been a specialist B2B editor and journalist covering the international transportation sector for more than 20 years. She has specialised in the significant safety, regulatory, and environmental issues that impact advanced technology businesses in the pursuit of more efficient, safer and sustainable transportation modes.

AM deputy editor Aimée Turner has been a specialist B2B editor and journalist covering the international transportation sector for more than 20 years.

She has specialised in the significant safety, regulatory, and environmental issues that impact advanced technology businesses in the pursuit of more efficient, safer and sustainable transportation modes.