UK plants built 40,872 cars and commercial vehicles in August, a 5.7% rise and only the second monthly increase this year, according to the Society of Motor Manufacturers and Traders (SMMT). The gain masks a sector still down 7.1% year-to-date and facing what the trade body calls an existential threat from Brussels.

Car production rose 6.1% to 39,328 units — the strongest increase since December 2025. Domestic-market demand drove the growth, up 26%, while export output edged up 1.4%. Exports still accounted for 77.1% of all cars built in the month.

Where did the exports go?

Shipments to Australia more than doubled, up 104.7%, with Japan up 88.4% and the US up 48.6%. The US delivered the largest absolute volume gain, adding 1,508 units.

Not every market performed. Shipments to Turkey fell 49.6%, China dropped 15%, and the EU declined 7.4%. The EU nonetheless remained the UK's largest overseas destination at 54.1% of exports.

Electrified vehicle output — battery electric and hybrid models combined — rose 2%, making up 43.6% of cars produced.

What happened to commercial vehicles?

Van, truck, bus and coach output fell 4.8% to just 1,544 units. Year-to-date CV volumes sit 50.9% below last year. August exports of CVs rose 10.9%, but a 15.5% drop in domestic output outweighed that gain.

The SMMT points to September's investment announcements — £1 billion in total from Nissan (£170m), McLaren (£500m) and Bentley (£350m) — as the more telling indicator of long-term prospects.

Why is confidence 'at risk'?

The EU's Industrial Accelerator Act and its 'Made in Europe' proposals threaten an €80bn trade partnership, the SMMT says. As drafted, the rules would render UK-built vehicles uncompetitive in their largest global market and hit European suppliers through reduced demand for EU-sourced components. British manufacturing generates €24 billion of economic activity in the EU supply chain and supports a quarter of a million jobs across the bloc, the SMMT claims — rules meant to strengthen European automotive risk weakening the industry they seek to protect.

Mike Hawes, SMMT chief executive, said: "August's return to growth and this month's £1 billion-plus investment commitments show hard-won confidence in UK automotive manufacturing, confidence that must be protected, not put at risk."

The industry wants the postponed EU-UK Summit rescheduled urgently to address both the Made in Europe issue and rules-of-origin changes under the Trade and Cooperation Agreement. From January 2027, tougher rules of origin impose additional tariffs on the majority of battery, electric and plug-in hybrid vehicles — costing at least £1.4 billion, the SMMT calculates, on top of the Industrial Accelerator Act's impact.

Hawes added: "The UK and EU automotive industries are deeply integrated, so effectively excluding British-produced vehicles from their largest market would assure mutual damage. Both sides must urgently agree practical fixes to protect jobs, preserve shared competitiveness and keep the EU and UK industry moving."

Reports suggest the EU has pressed the UK to raise tariffs on Chinese EV imports and align trade policy with the bloc as the price of avoiding Made in Europe barriers.

What to watch next: the rescheduling of the EU-UK Summit, and whether negotiators resolve the rules-of-origin question before the January 2027 tariff deadline.