UK car production enjoyed a dramatic increase during the month of July. According to the Society of Motor Manufacturers and Traders (SMMT), this is the second consecutive month of increase. This increase follows a rough three-month stretch of negative sales. To those weary of news from the automotive sector, this announcement from the SMMT — a 6.8% increase in production for July — was more than just good news.
As of July, the US is the largest single market for UK car exports. It represented 18.1% of all of those exports for that month. The EU is still the biggest single market, accounting for 45.6% of total exports in the first five months of this year. It’s great to see UK car manufacturing continuing a strong July trend. Year-to-date output is still 11.7% below where it was last year, showing tough times still persist in the industry.
The recent changes in tariffs applied has been at the heart of creating the current state of play for UK car exports. This comes just weeks after US President Donald Trump proposed a 25% import tax on UK cars. This decision compelled Jaguar Land Rover (JLR) to temporarily stop their shipments to the US. After months of negotiations, this import tax was reduced to 10% and went into effect at the end of June. The lower tariff only extends to the first 100,000 cars that Japan exports to the US. Any vehicles over that threshold will face the increased rate of 25%. Underlining the importance of this market, last year the UK exported almost 100,000 cars to the US.
Mike Hawes, chief executive of the SMMT, welcomed the distinct realities of the storm the automotive sector is currently weathering. He stated, “It remains a turbulent time for automotive manufacturing, with consumer confidence weak, trade flows volatile and massive investment in new technologies underway both here and abroad.” He added that given the current backdrop, “another month of growing car output is good news.”
Colleen McHugh, chief investment officer at Wealthify, stressed the importance of the US market for British-built cars. She noted that it remains “an important market for British-built cars,” reflecting ongoing opportunities for growth despite current challenges.