UK Car Production Declines by Over 11%: What It Means for Drivers, the Economy, and the Leasing Market
In February 2025, UK car production saw a significant downturn, with a drop of over 11% compared to the same period last year. This decline has raised concerns across the automotive sector, from manufacturing and supply chains to consumers and the vehicle leasing industry. While some of the causes are short-term disruptions, the trend also reflects broader structural shifts.
At Pendle Lease, we’re always keeping a close eye on developments in the automotive world so we can best serve our personal lease and business lease customers. In this blog, we’ll explore why UK car production has fallen, what it could mean for vehicle leasing, and how customers can navigate these changes with confidence.
Why Has UK Car Production Dropped?
1. Export Challenges and Global Headwinds
The Society of Motor Manufacturers and Traders (SMMT) reports that a major contributor to the decline has been reduced demand from overseas markets. Export production, which makes up a large proportion of UK car manufacturing, fell significantly as key European and Asian markets slowed.
2. EV Transition Pressures
Manufacturers are facing growing costs and complexities tied to the shift toward electric vehicles. As investment pivots toward EV production lines, some conventional car production has been scaled back temporarily.
3. Parts and Supply Chain Issues
Ongoing global supply chain disruptions, particularly around semiconductor chips and EV battery components, have constrained the number of vehicles manufacturers can complete and ship.
4. UK Market Adjustments
Domestically, changing consumer preferences and cautious spending amid interest rate concerns have also impacted production levels.
What Does This Mean for Car Leasing?
1. Longer Lead Times on New Vehicles
With fewer new cars rolling off UK production lines, there may be longer waiting times for popular models—particularly those made in Britain or those sharing components with British-made models. This can affect both personal lease and business lease timelines.
At Pendle Lease, we’re working closely with our supply partners to provide accurate lead time updates and recommend alternative models with faster delivery.
2. Higher Demand for In-Stock Vehicles
As new car production slows, available stock becomes more valuable. Drivers looking to lease quickly are increasingly turning to in-stock lease deals to avoid delays.
We’ve expanded our inventory of ready-to-drive vehicles, helping customers secure a lease without the wait.
3. Used Vehicle Leasing Gaining Popularity
A downturn in new production often shifts attention to the used market. As fewer new cars are produced, demand increases for nearly-new or high-quality used vehicles.
Pendle Lease has seen growing interest in used car leasing, offering excellent value and shorter wait times while maintaining vehicle quality and reliability.
The Bigger Picture: Economic and Industry Impact
1. Jobs and Manufacturing Confidence
A fall in car production risks impacting employment in key regions of the UK, including the Midlands and North East, where many manufacturing plants are located. It also sends signals of caution to investors.
However, the government and industry groups are doubling down on long-term EV investment, with billions pledged to gigafactory projects and electrification infrastructure.
2. Boost for Imported Models
With domestic output falling, imports may temporarily fill the gap. This could affect vehicle choices available to leasing customers, especially if pricing on imported models becomes more competitive.
At Pendle Lease, we offer a wide range of both UK-built and international models to give our customers flexibility and choice.
3. Policy Pressure
The decline in production places additional pressure on policymakers to support the UK car industry with targeted incentives, EV manufacturing support, and trade agreements that open up new markets.
What Can Personal and Business Lease Customers Do?
Whether you’re a business looking to expand your fleet or an individual exploring your next personal lease, the current production decline shouldn’t deter you. In fact, there are plenty of smart options available:
- Act Early: If you have a preferred make or model, consider starting your leasing process sooner rather than later.
- Be Flexible: There are great deals on alternative models with shorter lead times.
- Consider Used Leasing: High-spec used vehicles are more accessible than ever.
- Partner with a Trusted Provider: Pendle Lease offers transparent advice, reliable delivery estimates, and a wide selection of in-stock and used vehicles.
Final Thoughts: A Bump in the Road, Not a Roadblock
An 11% decline in UK car production is certainly a concern, but it's also a moment of transition for the industry. Manufacturers are recalibrating for the electric future, and global pressures are forcing change.
For leasing customers, this period offers both challenges and opportunities. With providers like Pendle Lease adapting to market shifts and expanding their offerings, you can still get behind the wheel of your next vehicle without compromise.
Explore our latest vehicle leasing deals today and let Pendle Lease help you stay on track—no matter what the production lines are doing.
