Commercial vehicle production was down 68.3%, with 2,756 vehicles produced in March, according to figures published by the Society of Motor Manufacturers and Traders (SMMT).
Overall UK vehicle production fell 8.2% in March, with 72,511 units rolling out of factories,
69,755 cars, down 0.8% were produced following positive growth last year.
Car output was affected by a part supply challenge, temporarily pausing production at a large plant, weak exports to Asian and US markets, and model changeovers, according to the SMMT.
Exports of cars and CVs both fell, down 4.3% and 54.0%, to 49,339 and 1,602 units respectively.
Despite this, production for overseas buyers still accounted for the majority (70.3%) of vehicle output.
The EU remained the UK’s largest global market, taking 91.6% (1,467 units) of CV exports and 62.6% (30,899 units) of car exports.
EU demand for UK-built cars rose for a fourth consecutive month, with exports up 4.8% year-on-year.
That growth, however, was offset by a decline in production for the US (24.1%), China (47.9%) and Japan (25.3%), which together accounted for 18.6% of all shipments.
Car output for British buyers, meanwhile, rose 8.7%, while CV production for the UK fell 77.9%.
In the first quarter, UK factories produced 208,088 vehicles, down 13% on the same period in 2025.
Car output fell 6.7% to 200,889 units, while CV volumes declined 70.0% to 7,199 units, again due primarily to last year’s closure of one of the UK’s larger plants.
Output for overseas markets represented 75.8% of all vehicles made, although exports fell 12.4%, with production for the UK down 14.8%.
The SMMT said the announcement earlier this month of the final design of the British Industry Competitiveness Scheme (BICS) represented a major win for Britain’s automotive manufacturers.
It added that energy price volatility from the ongoing conflict in the Middle East is likely to raise costs in the short to medium term, and the impact of oil price rises could also dampen demand in key markets.
Furthermore, the sector faces the prospect of being severely disadvantaged by the EU’s proposed Industrial Accelerator Act and ‘Made in Europe’ policy which, as currently drafted could exclude UK automotive products from substantial segments of the European market undermining the competitive position of UK plants, according to the SMMT.
Given the interdependence of EU-UK automotive trade, worth an annual €80bn, and with the balance firmly in favour of the EU, the SMMT is calling for urgent amendments to the policy to ensure the UK automotive sector continues to be treated as a trusted partner.
It explained that granting UK-built vehicles, parts, and batteries equivalent treatment across all relevant provisions would protect a long-established, mutually beneficial trading relationship that supports jobs, supply chain resilience, industrial transformation and decarbonisation, and ensures consumer choice and affordability.
Manufacturers on both sides also face the prospect of tariffs on electrified vehicles and batteries with the introduction of tougher rules of origin in 2027 as part of the Trade Cooperation Agreement.
As a result, the SMMT said the industry is urging Governments to look at pragmatic solutions and use the forthcoming EU-UK summit to include discussion of automotive issues so that the trading relationship can be improved to mutual benefit.
Mike Hawes, chief executive at the SMMT, said: “Car production stabilising in March is welcome news for both assembly and the wider supply chain.
“Government’s recent intervention to bring down electricity costs will provide a major and long-called for boost, but the scheme’s benefits must be delivered urgently as the geopolitical situation offers little optimism.
“We must ensure any ‘Made in Europe’ proposals from the European Commission do not exclude the UK as the two industries are integrated such that both would suffer if the free trade provisions enshrined in the Brexit deal were undermined.
“The EU and UK must work together to avoid that scenario – and the looming threat of tariffs arising from stricter rules of origin on electrified vehicles – to ensure a positive outcome for industry, economies and consumers on both sides of the Channel.”
Reactions:
John Cassidy, managing director at Close Brothers Motor Finance:
“Following February’s falling numbers, a further decline in March will cause concern for manufacturers as the impact of geopolitical events start to take hold.
“The conflict in the Middle East, the threat of further tariffs and concerns that the UK could be omitted from the EU’s ‘Made in Europe’ trusted partner agenda are presenting additional headaches for manufacturers who are already grappling with other challenges such as the Zero Emission Vehicle (ZEV) mandate.
“The onus falls on the Government to ensure the UK holds trusted partner status, and works to remove barriers hampering vehicle production, allowing car makers to cater for growing demand for EV adoption.”
