UK vehicle production rose for the first time this year in May, but the Society of Motor Manufacturers and Traders (SMMT) has warned the recovery will not be sustained without action to improve the UK’s competitiveness.
Vehicle production increased 2.7% to 51,178 units during the month, ending four consecutive months of declining car output.
However, the SMMT said lower industrial energy costs, continued free trade with the EU and changes to the Zero Emission Vehicle (ZEV) mandate are needed to support long-term growth.
Car production increased 3.2% to 49,249 units, while commercial vehicle output fell 7.6% to 1,929 units.
The improvement was driven by export demand.
Car exports rose 3.9% to 38,897 units and commercial vehicle shipments increased 61% to 1,391 units, lifting overall vehicle exports by 5.2%.
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UK market production demand subdued
Production for the UK market remained subdued.
Car output for domestic buyers edged up just 0.7% to 10,352 units, while commercial vehicle production for UK customers fell 56% to 538 units.
Among the UK’s largest export markets, shipments to the US increased 83.1% to 7,733 units following the UK-US trade deal that came into force in June 2025.
Exports to the EU fell 5.2% to 20,057 units, while those to China declined 14.3% to 2,794 units.
Despite May’s improvement, UK factories built 317,779 vehicles during the first five months of 2026, down 8.7% on the same period last year.
Car production fell 4.1% year-on-year, while commercial vehicle output was down 60%.
Exports accounted for 76.4% of all vehicle production in the first five months of the year, with almost 243,000 vehicles shipped overseas.
Hope of a sustained recovery
Mike Hawes, SMMT chief executive, welcomed May’s return to growth but said the priority was to turn it into a sustained recovery.
He said: “May’s growth is welcome, and the priority must be to turn this into a sustained recovery by making the UK more competitive as a place to make and sell vehicles.”
Hawes said this meant reducing industrial costs, maintaining free and open trade with the EU and ensuring the ZEV mandate “reflects market reality”.
He added: “Manufacturers are investing billions in zero emission technology, but weak underlying demand and the growing cost of compliance are putting competitiveness, jobs and future investment at risk.
“A mandate aligned with real-world conditions would support decarbonisation, strengthen the market, and help unlock the investment needed for long-term economic growth.”