Britain's vehicle manufacturing sector has plunged to depths not witnessed since 1949 in a major wake-up call for the vital industry.

Car and commercial vehicle production in May 2025 plummeted 32.8 per cent to just 49,810 units, the lowest monthly performance since 1949, excluding the coronavirus pandemic.

New data from the Society of Motor Manufacturers and Traders (SMMT) suggested this was down to multiple factors, including model changeovers, industrial restructuring and the damaging effect of American tariffs.

Year-to-date figures paint an equally bleak picture, with total output down 12.9 per cent compared to 2024, reaching only 348,226 units - the lowest annual production rate since 1953.

UK car production has fallen to levels not seen in more than 70 years

Car manufacturing fell by 31.5 per cent in May, with just 47,723 units produced, whilst commercial vehicle output suffered an even steeper decline of 53.6 per cent to 2,087 units.

The commercial vehicle sector continues to feel the impact of a plant closure, which has skewed year-on-year comparisons.

The domestic market bore the brunt of the downturn, with production for UK buyers dropping more than 42 per cent.

This sharp domestic decline meant exports now represent a larger proportion of total output, rising to 78.5 per cent despite export volumes themselves falling by 27.8 per cent.

Experts noted that there was cause for optimism moving forward in the car production sector

The manufacturing slump marks the fifth consecutive monthly decline for the sector, underlining the sustained nature of the current crisis facing British vehicle production.

Despite the grim figures, industry leaders see potential for recovery through recently secured trade agreements.

Mike Hawes, chief executive of the SMMT, said: "While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future.

"Confirmed trade deals with crucial markets, especially the US and a more positive relationship with the EU, as well as government strategies on industry and trade that recognise the critical role the sector plays in driving economic growth, should help recovery."

The new US trade agreement, which is expected to be formalised on Monday, June 30, will see tariffs cut from 27.5 per cent to just 10 per cent.

While there is a cap on the number of vehicles that can be exported to the US under the 10 per cent rate, the move has been praised by automotive experts.

Combined with deals involving the EU and India, these agreements could help Britain reclaim its position among the world's top 15 automotive manufacturing nations.

In May, the United States market was particularly affected, with exports plummeting 55.4 per cent as America's share of UK vehicle exports shrank from 18.2 per cent to just 11.3 per cent.

Stellantis announced the planned closure of its Luton van factory last year STELLANTIS

The low figures were the result of President Trump's imposition of retaliatory tariffs on "Liberation Day" at the start of April.

The SMMT reported that these tariffs had "depressed demand instantly, forcing many manufacturers to stop shipments".

Exports to the European Union, Britain's largest market, fell 22.5 per cent, whilst shipments to China and Turkey declined 11.5 per cent and 51 per cent respectively.

The EU remains the dominant customer for British commercial vehicles, accounting for 94.7 per cent of exports despite volumes falling 72.1 per cent.