Mathilde Carlier
Research Expert covering transportation and logistics
Automotive industry in the United Kingdom - Statistics & facts
Known for its premium and sports car brands, the United Kingdom’s automotive industry recorded one of its best years since the COVID-19 pandemic, Brexit, the cost of living crisis, and supply chain shortages in 2023. That year, the motor industry contributed some 22 billion Pound sterling to the UK’s economy, reaching levels not recorded since 2016. However, this large economic contribution is not inherently synonym with the sector’s recovery. Various challenges still compromise the UK automotive industry’s domestic and international performance.
Most of the country’s best-selling car brands were international marques, with the German Volkswagen and American Ford leading the ranking. Four of the ten most popular makes were headquartered in the European Union, which remains the UK’s main trading partner despite the post-Brexit trade tariffs for import and exports. Over 70 percent of the country’s automotive imports in 2023 came from the EU. In contrast, the region appears less dependent on car imports from the UK, as China is its main trading partner, and Japanese car imports are close behind those coming from the UK.
While inflation can make used vehicles more attractive to consumers, the UK government's efforts to decarbonize its transportation sector are also leading to changes in the market. electric vehicles, following a growing international trend, are also gaining popularity among consumers and manufacturers in the United Kingdom and have helped boost monthly sales in the country in 2023. These factors suggest a slow shift within the UK's automotive industry.
The UK automotive industry contends with its maintained dependence on the European Union for its automotive trade, a negative trade balance, and rising inflation impacting both its domestic and international performance. The country remains one of the largest European car markets, but its automotive industry, geared towards exports, is not fully exploiting this large consumer pool.
Dependence on the EU remains
In 2023, the United Kingdom was among the ten leading countries based on car exports, but its export value within this segment was not enough to offset its large imports, leading to a trade deficit in that segment. The same was true for its goods vehicle trade, of which the UK imported some 11.2 billion U.S. dollars worth of commercial vehicles (some 8.9 billion Pound sterling as of a December 17, 2024 exchange rate). As most of the cars manufactured in the United Kingdom were exported, its reliance on foreign trade to meet its increasing motorization needs.Most of the country’s best-selling car brands were international marques, with the German Volkswagen and American Ford leading the ranking. Four of the ten most popular makes were headquartered in the European Union, which remains the UK’s main trading partner despite the post-Brexit trade tariffs for import and exports. Over 70 percent of the country’s automotive imports in 2023 came from the EU. In contrast, the region appears less dependent on car imports from the UK, as China is its main trading partner, and Japanese car imports are close behind those coming from the UK.
Inflation impacts the industry
On the domestic front, UK consumers tended to purchase more used cars than new vehicles. While this interest in second-hand vehicles has been present since at least the early 2000s, the high inflation rate and cost of living crisis in the United Kingdom are making this market segment more attractive to consumers. In 2023, the country recorded its highest consumer price index for new car purchases after a decade of consistent growth. In contrast, the consumer price index for used car purchases went down between 2022 and 2023.While inflation can make used vehicles more attractive to consumers, the UK government's efforts to decarbonize its transportation sector are also leading to changes in the market. electric vehicles, following a growing international trend, are also gaining popularity among consumers and manufacturers in the United Kingdom and have helped boost monthly sales in the country in 2023. These factors suggest a slow shift within the UK's automotive industry.
The UK automotive industry contends with its maintained dependence on the European Union for its automotive trade, a negative trade balance, and rising inflation impacting both its domestic and international performance. The country remains one of the largest European car markets, but its automotive industry, geared towards exports, is not fully exploiting this large consumer pool.
