UK car production in May rose 26.9% year on year, marking its highest growth for the month since the pandemic hit.

UK car production output maintained momentum, growing 26.9% in May to 79,046 units

A total of 79,046 units left production lines last month, 16,762 more than in the same month last year and marking a fourth consecutive month of growth for the sector. But the total was still down 31.9% on May 2019.

Both domestic and overseas orders recorded double-digit growth but it was the former that rose the highest; up 45.4% to 16,188. Exports were up 22.9% to 62,858 – and continued to take the lion’s share of production output, at 79.5%. The EU remains the biggest global market, taking 35,215 units, up 19.0% and representing 56.0% of all overseas shipments in the month. Such a trend reinforces the need for continued tariff-free trade between the UK and EU, in particular for electric vehicles, which face the threat of 10% tariffs unless tougher trade rules due to come into force on 1 January 2024 are postponed.

Combined, UK car exports to the next largest markets, the US, China, Japan and Australia, represented less than a third (28.3%) of exports in May, and, at a total of 17,798 units, about half of all those sent into the EU.

Volumes for the domestic market surged 45.4% to 16,188 while exports rose 22.9% to 62,858.

Mike Hawes, SMMT chief executive, said: “Another month of growth for UK car production is good news and a sign that, despite challenging economic conditions, the industry’s foundations are strong. But with weak GDP growth, high inflation and rising interest rates, it’s crucial that UK car factories stay globally competitive. All political parties must recognise the strategic importance of this sector and back our call for an industrial strategy that supports local production, assures export market access and attracts further investment to safeguard our future.”

Close Brothers Motor Finance said the latest growth figures showed carmakers were back on track to restore car production to pre-pandemic levels.

Lisa Watson, director of sales, continued: “Though challenges remain, easing supply shortages have contributed to a more positive outlook.

“This increase in production is also positive for consumers. An influx of new cars will support much needed stock moving into the used market, enabling more availability and choice for consumers looking to purchase second-hand cars. This should also make alternative fuel vehicles (AFVs) an increasingly viable option for buyers.

“Manufacturers will, however, be hoping that stagnant inflation and continued economic pressures don’t hamper consumer demand and have an adverse effect on production.”

Earlier this week, the SMMT launched its ‘Manifesto 2030: Automotive growth for a zero-emission future’ which seeks cross-party support for five pledges that would help create the conditions for a 10-fold rise in annual EV production to over 750,000 units per year by 2030 – worth a cumulative £106bn at the factory gate.