UK car production took a sharp hit in September, falling by 27.1% as output dropped to 51,090 units, according to the latest figures released by the
Society of Motor Manufacturers and Traders (SMMT). The decline was largely attributed to a production stoppage at Jaguar Land Rover, the country’s largest automotive employer, following a major cyber incident. While other volume manufacturers posted gains, the disruption proved significant enough to drag down the sector’s overall performance.
Despite the setback, electrified vehicles continued to gain ground. Nearly half of all cars built—47.8% — were battery electric, plug-in hybrid or hybrid models, with production of these vehicles rising 14.7% to 24,445 units. However, domestic demand remained subdued — cars built for the UK market fell by 34.1% to 12,269 units, while exports dropped 24.5%. Of the total output, 76% was destined for overseas markets, with the European Union (EU), USA, Turkey, Japan and South Korea leading the list of export destinations.
Commercial vehicle production also struggled, marking its sixth consecutive monthly decline. Output fell by a staggering 77.9% to just 3,229 units, a drop driven by operational consolidation at a major manufacturer. Combined car and van production stood at 54,319 units for the month, down 35.9% year-on-year.
The figures arrive ahead of the Chancellor’s Autumn Budget on 26 November, with the automotive sector urging the Government to align fiscal policy with the ambitions of the Modern Industrial Strategy. The SMMT says that industry leaders are particularly concerned about proposed changes to Employee Car Ownership Schemes (ECOS), which could see vehicles reclassified and subjected to company car tax. The move threatens to make these schemes unaffordable for many workers, undermining a key component of manufacturer remuneration packages.
Stark financial implications for UK economyNew analysis suggests that up to 60,000 manufacturing workers could be affected, potentially losing access to personal transport. The report warns: “The impact will be especially severe for factory employees in regions lacking adequate public transport,” noting that such changes could hinder shift flexibility and exacerbate recruitment challenges in a sector already facing a skills shortage — the ripple effects could be far-reaching. The SMMT estimates a potential annual reduction of 80,000 new car sales, a blow to the nearly new and used car markets, and a drop in UK production volumes by up to 20,000 units. The financial implications are stark; more than £1 billion in lost revenue, 5,000 jobs at risk, and a £500 million hit to Government coffers through reduced VAT and Vehicle Excise Duty receipts.
Mike Hawes, the SMMT’s chief executive, said: “September’s performance comes as no surprise given the total loss of production at Britain’s largest automotive employer following a cyber incident. While the situation has improved, the sector remains under immense pressure. The Industrial Strategy, launched by the Prime Minister, Business Secretary and Chancellor only in June, sought to align Government policies towards growth and restore UK vehicle output to 1.3 million units per annum. The move to scrap ECOS immediately puts that ambition in doubt and must be reversed given the damage it will inflict on the sector and exchequer revenues.”
So far this year, UK car and van factories have produced 582,250 units, a 15.2% decline compared to the same period in 2024. With global industrial conditions remaining tough, the industry is calling for swift action. Retaining ECOS schemes would offer immediate relief to workers and investors alike. Additional measures — such as accelerating the British Industrial Competitiveness Scheme (BICS) to 2026, reforming skills funding, and bolstering supply chain resilience — are also seen as vital steps to stabilise and grow the sector.