UK car production surged ahead in January, as revealed by the latest data from the Society of Motor Manufacturers and Traders (SMMT).

With volumes increasing by a substantial 21.0% to reach 82,997 units, this represents the strongest January performance since 2021 and marks the fifth consecutive month of growth. The boost in production comes amidst a backdrop of rising global demand for British-made vehicles and a gradual easing of supply chain challenges, notably semiconductor shortages.

The majority of the produced cars were destined for export markets, accounting for 75.8% of total output. Overseas shipments saw a notable uptick of 11.6% to 62,938 units, representing an increase of 6,559 units. However, the most significant volume growth was observed in the domestic market, with production for domestic consumption rising by an impressive 64.5%, equating to an additional 7,863 units.

Among the major global markets, the EU emerged as the primary destination for British-built cars, receiving over half (53.2%) of all exports. This was followed by the US (15.0%), China (10.5%), Japan (2.8%), and Australia (2.3%). Notably, shipments to the EU, US, and China experienced notable increases of 5.0%, 81.1%, and 33.2% respectively.

The production of battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles also saw an uptick, rising by a combined 4.5% to 29,590 units, constituting 35.7% of overall output. The majority of these electrified models were destined for export markets, underscoring the importance of not only increasing production of electrified vehicles but also securing favorable trading arrangements with global markets.

Mike Hawes, Chief Executive of SMMT, expressed optimism regarding the positive start to the year for UK car production but cautioned against complacency in light of economic challenges and geopolitical tensions. He emphasized the need for continued commitment to competitiveness and urged the government to introduce measures aimed at boosting UK automotive manufacturing, particularly focusing on energy, investment competitiveness, and market demand, in the upcoming Budget.

While potential impacts on UK car manufacturing arising from incidents in the Red Sea remain uncertain, the latest independent outlook suggests a positive trajectory, with UK car and light van production expected to rise by approximately 3% in 2024, reaching 1.04 million units.