(Reuters) -Britain’s vehicle output, including those of electric and hybrid automobiles, fell in February, industry data showed on Thursday, underscoring the persistent challenges faced by the auto sector amid escalating global economic uncertainties.
Total car and commercial vehicle production fell nearly 12% from a year ago to 82,178 units last month, according to data from the Society of Motor Manufacturers and Traders (SMMT), while battery electric, plug-in hybrid and hybrid car output dipped 5.6%.
Car production in Britain recorded its twelfth consecutive month of declines, data showed, as automakers worldwide struggle with rising costs, sluggish demand and stiff competition from Chinese rivals as well as stringent carbon regulation.
Late on Wednesday, U.S. President Donald Trump imposed a 25% tariff on imported vehicles, rocking automakers and ratcheting up trade tensions as threats of retaliation from affected U.S. allies now loom large.
The U.S. is the second-biggest importer of British-made cars after the European Union, with nearly a 20% share, SMMT data showed, and more than eight out of ten cars produced in Britain in February were exported.
SMMT chief executive Mike Hawes in a statement urged U.S. and the UK to “come together immediately and strike a deal that works for all,” adding that while the tariffs were not surprising, it seemed likely that additional tariffs would apply to cars made in Britain.
Meanwhile, British car production for the domestic market in February slumped roughly 33% to 13,780 units on a year-on-year basis.
Britons are putting off major purchases as they grapple with rising inflation, a slow pace of interest rate cuts and wider economic woes that the government is racing to address.
On Wednesday, British finance minister Rachel Reeves cut the government’s plans for spending increases to get back on track towards her fiscal targets, but risks in the world economy could raise the prospect of tax hikes later this year.
SMMT’s Hawes emphasised the need for supportive policies, noting that Reeves’ budget update offered no relief for the industry or consumers.
(Reporting by Aby Jose Koilparambil and Pushkala Aripaka in Bengaluru; Editing by Alan Barona and Mrigank Dhaniwala)
