º£½ÇÊÓƵ car production plummeted to its lowest level since 1949 last month, as British carmakers such as Aston Martin halted exports to the United States amidst escalating trade tensions under President Donald Trump.
Figures released on Friday by the Society of Motor Manufacturers and Traders (SMMT) revealed that º£½ÇÊÓƵ factories produced a mere 49,810 cars and vans in May, marking a 33 per cent year-on-year decrease and the poorest monthly performance in 76 years, excluding the COVID-19 shutdowns of 2020, as reported by .
This downturn follows Trump's imposition of hefty tariffs on foreign-made cars, leading British companies like Aston Martin and Jaguar Land Rover to suspend shipments to the US from April.
Exports to the US saw a sharp decline of 55 per cent in May, reducing the American market's share of º£½ÇÊÓƵ automotive exports from 18 per cent to a mere 11 per cent.
Meanwhile, exports to the EU also fell by 22.5 per cent.
However, the trade impasse could potentially ease next week when a new º£½ÇÊÓƵ-US trade agreement comes into effect.
Under this deal, the US will lower its automotive import tariff from 27.5 per cent to 10 per cent for the first 100,000 º£½ÇÊÓƵ-manufactured vehicles shipped annually.
The agreement, announced by Trump on 16 June during the G7 summit in Canada, comes after weeks of instability sparked by his so-called 'liberation day' tariffs blitz, which increased levies on steel, car and aluminium imports from US trading partners.
Aston Martin in the spotlight
Aston Martin experienced a sharp downturn in its shares, from 119p to under 60p, amidst the chaos of tariffs which led the company to significantly cut exports to the US at the end of April. In light of the turbulence, the stock, listed on the FTSE 250, mounted a near 13 per cent recovery on the day of the announcement but has since struggled to climb out of its slump, ending at 70p on Wednesday.
In a scramble to take advantage of the new trade opportunity, Aston Martin's CEO, Adrian Hallmark, detailed the firm's aggressive plans: "It comes live on the 30th June... so we're planning to invoice three months' worth of sales in a 24-hour period."
Hallmark also voiced relief over the agreement, remarking that º£½ÇÊÓƵ car manufacturers were now "less worse off than some of (their) European and non-European competitors."
Wider industry pressures
Acknowledging the severe impact of the tariff dispute, Mike Hawes, the chief executive of the SMMT, conveyed a cautious optimism regarding the º£½ÇÊÓƵ automotive production outlook for 2025 amid very challenging conditions, bolstered by the trade cease-fire and a new industrial strategy aiming to reduce energy costs for manufacturers by up to 25 per cent. The challenges for Britain's carmakers were mounting even prior to the tariff issues, driven by the government-imposed zero-emission vehicle (ZEV) mandate demanding escalating EV sales targets, prompting widespread structural shifts within the industry.
Stellantis cited the cost of ZEV compliance last year as a factor in its decision to shut down its Luton factory and consolidate products at Ellesmere Port.
In a similar vein, Ford cut 800 º£½ÇÊÓƵ jobs as part of a wider European retrenchment.
Cyril Aboujaoude, co-founder of private equity firm Tioopo Capital, commented: "This deal has the potential to mark a positive shift in the º£½ÇÊÓƵ-US industrial trade, but its long-term value will depend on more than short-term quota relief."
He further stated: "Long term visibility is essential – not just for the major auto manufacturers, but for the mid-sized, high spec engineering firms that represent the future of º£½ÇÊÓƵ innovation."
