UK made fewer vehicles for the fifth straight month in May as tariffs bite

Britain’s vehicle production declined from a year ago for the fifth successive month in May, industry data showed on Friday, as factory disruptions and US tariffs weighed on automakers.

UK car and commercial vehicle production dropped 32.8 per cent from a year ago to 49,810 units last month, marking the worst percentage drop in May output since 1949, excluding the Covid-19 pandemic-hit 2020, according to data from the Society of Motor Manufacturers and Traders.

Exports to the UK’s two biggest markets, the EU and the US, declined by 22.5 per cent and 55.4 per cent respectively, SMMT said.

US President Donald Trump’s 25 per cent tariffs on imported automobiles and parts, imposed in March, have disrupted global supply chains, added hundreds of millions of dollars in costs for manufacturers, prompted export suspensions and pushed several automakers, especially in Europe, to consider shifting production to the US to avoid the duties.

British manufacturing also contracted in May, as output, orders and employment declined.

Still, SMMT chief Mike Hawes said the UK’s trade deals, especially with the US, and a more positive relationship with the EU, provided some optimism.

The US and UK reaffirmed a previously agreed trade deal during the G7 summit in Canada earlier this month, under which up to 100,000 UK-made cars a year can enter the US at a 10 per cent tariff, lower than the 25 per cent rates other countries face.

In May, Britain reached a trade deal with India to lower tariffs and set quotas on auto imports, while also moving closer to the European Union on cooperation in defence, energy and agriculture.

Car production, excluding commercial vehicles, dropped by 31.5 per cent in May, largely driven by model changeovers, restructuring and the impact of US tariffs, SMMT said. REUTERS