UK vehicle recovery hinges on export access and easing production mandates
Commenting on the latest SMMT UK vehicle manufacturing data, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, said:
"The year-on-year uplift in UK vehicle production in May is a promising sign of sector recovery, reversing the trend of decline we saw at the start of the year. It follows last month's 10.7% fall, which reflected the Stellantis commercial vehicle closure and model changeovers, indicating that the sector is beginning to stabilise.
"Exports remain the industry's biggest pressure point, and the proposed 'Made in Europe' initiative could prove decisive either way. If the UK is included, manufacturers would gain the procurement support, investment incentives and supply chain advantages on offer to European producers – a meaningful boost at a time when volumes are already stretched. If the UK is left out, domestic manufacturers risk being shut out of their most important export market, and some of the inward investment now being courted, could ultimately flow to plants in mainland Europe instead.
"There are still grounds for cautious optimism. Nissan's Sunderland plant may see some short-term disruption following recent production changes, but the Chery partnership and potential government support, point to a stronger medium-term outlook – provided the wider export picture allows it.
“The priority now is policy certainty on EV mandates, investment and supply chains, so that future production is built in the UK rather than elsewhere. With potential changes to the ZEV mandate still under discussion and future political leadership likely to influence the direction of EV policy, manufacturers remain in limbo over the long-term regulatory environment needed to support investment decisions."