In brief
The Society of Motor Manufacturers and Traders (SMMT) cautioned that European Union (EU) trade measures could derail the UK’s projected vehicle production recovery, with exports to the EU at 57.5% of total. According to an independent outlook released by the SMMT, car output will fall in 2026 but rebound to 752,000 units in 2027, largely driven by electric vehicles. The SMMT points to the EU’s “Made in EU” proposals and stricter rules of origin set to take effect in 2027—potentially adding £1.4 billion in tariffs—as key threats to the industry, and calls the upcoming EU‑UK Summit a crucial opportunity to negotiate safeguards.
On Oct. 29, 2026, the London‑based Society of Motor Manufacturers and Traders (SMMT) warned that new European Union trade measures could impede the United Kingdom’s expected vehicle production recovery, according to a report by Xinhua.
The SMMT’s independent industry outlook projects a decline in U.K. vehicle output this year, followed by a rebound to 752,000 units in 2027, mainly driven by electric vehicles.
The society flagged three major threats to the industry’s competitiveness, two of which stem from Britain’s trade relationship with the EU. First, the EU Commission’s “Made in EU” proposals, in their current form, could effectively exclude British‑built cars from the EU market. Second, stricter rules of origin slated to take effect in 2027 under the EU‑UK Trade Cooperation Agreement could impose tariffs totalling £1.4 billion (about $1.9 billion) annually on two‑way electric‑vehicle trade.
Exports accounted for more than three‑quarters of U.K. vehicle production in September, with the EU receiving 57.5 percent of those exports—figures that underscore the magnitude of the potential impact.
Both the EU measures and the projected tariff costs are still unconfirmed in terms of their final legal wording and enforcement mechanisms, but the SMMT stresses that the industry would suffer damage on both sides if they are implemented as projected.
In response, the SMMT called the forthcoming EU‑UK Summit “a vital opportunity to agree pragmatic solutions and safeguard an €80‑billion (about $90 billion) trading relationship,” urging negotiators to protect U.K. interests and maintain the UK’s attractiveness as an investment destination.
