UK car manufacturing output soared 14.8% in November, representing the best performance for the month since 2020.

UK car production grew 14.8% in November with 91,923 cars leaving factory gates

Turning a corner from supply chain challenges, a total of 91,923 cars rolled out of factory gates, an increase of 11,832 on November last year.

Production for both the home and overseas markets increased, up 13.4% and 15.2% respectively, according to the new figures from the Society of Motor Manufacturers and Traders (SMMT). However, it was exports as always that drove volumes, accounting for 75.1% of production.

Europe received the bulk (60.8%) of all shipments, underscoring the need for the newly ratified deal on tariff-free electrified vehicle trade across the Channel.

Output of electric vehicles – battery electric, plug-in hybrid and hybrids – was up 20.0% to 35,169 in November and representing 38.3% of total manufacturing output. Year-to-date EV volumes are up 53.7% on the same period in 2022, pushing overall production volumes up 119,499 units on 2022, to 843,345 units – already 68,331 units ahead of full year 2022 with December’s figures still to come.

Mike Hawes, SMMT chief executive, said: “UK car production is firmly back on track following the tough Covid years and resulting supply chain challenges. With significant investment committed to UK automotive manufacturing, production volumes increasing and the imminent threat of tariffs on EVs traded with the EU now removed by the extension of current rules of origin until 2027, there is renewed confidence in the sector.”

While the new deal between the UK and EU avoids tariffs on electric vehicles, it does still mean that the auto industry needs homegrown batteries to meet the 2027 targets.

Hawes added: “We now need to see the Anglo-European battery industry build capacity at pace to meet forecast demand.”

All eyes are now on 2024 new car demand and the latest market outlook was recently revised upwards to reflect market growth higher than expected. Overall new car registrations are anticipated to reach 1.886 million by the end of next year, a rise of 2.1% on July’s expectations, although expectations for battery electric vehicle uptake have been downgraded slightly to an expected market share at year end of 17.2% – falling under the 22% that carmakers will be required to hit under the new ZEV mandate.

Both Cox Automotive and Auto Trader have also predicted new car market growth for 2024 on the back of strong fleet demand, in particular for EVs.

However, concerns remain about private buyer demand, both in general and for EVs.

Richard Peberdy, UK head of automotive for KPMG, said: “Fleet and business car buying continues to drive growth in the UK new car market. At the end of 2023, private sales are broadly at the same level as the previous year, with minimal growth. Given how prolonged the squeeze on household finances has been from inflation and higher rates it’s perhaps not surprising.

“The question for the UK car market is how it responds should private sales go into reverse in 2024. With increased brand competition, including lower-cost international entrants, how far do carmakers respond with discounting and incentivisation – which has made a significant return in the last month, but which they haven’t needed to do during the pandemic years.”