The UK’s luxury car manufacturers are facing significant challenges that threaten their competitiveness and growth, according to a recent report by the Society of Motor Manufacturers and Traders (SMMT). The industry, which includes renowned brands such as Aston Martin, McLaren, and Morgan, generated over £5.5 billion in revenue in 2024, with approximately 90% of their vehicles being exported overseas.
Industry Overview
Despite accounting for only 4% of the UK’s total car production, these high-value, small-volume manufacturers contributed 12% to the industry’s overall value. The sector is also a significant employer, with over 15,000 people engaged in high-skilled, well-paid jobs.
Challenges and Opportunities
The SMMT report highlights that companies in this sector are navigating volatile trading conditions, decarbonization rules, and production cost pressures. Mike Hawes, SMMT chief executive, emphasized that these ‘multiple geopolitical headwinds’ require the industry and government to work together to ensure the sector’s survival and growth.
Industry minister Sarah Jones echoed this sentiment, highlighting the government’s commitment to supporting the industry through landmark trade deals, such as those with the US and India, which aim to reduce tariffs and create new export opportunities. The UK-US trade deal, agreed upon in May, includes a reduction in American tariffs on UK cars from 27.5% to 10% for the first 100,000 vehicles exported.
Government Support
The government’s modern industrial strategy is set to outline a long-term plan to support manufacturers by creating favorable conditions for increased investment, thereby promoting growth, jobs, and opportunities across the UK. As Hawes noted, a thriving luxury automotive sector would deliver significant economic benefits, including well-paid jobs and exports, keeping Britain prominent on the global automotive stage.
