UK auto output rebounds in August but 'Made in Europe' proposals pose threat, industry data shows

Sept 30 (Reuters) - Britain's vehicle production rebounded in August as domestic car demand picked up, industry data showed on Wednesday, but a deepening EU trade dispute threatens to weigh on the sector's long-term outlook.

Auto production in the UK rose 5.7% to 40,872 units in August, a month typically characterised by low output and volatility due to scheduled plant shutdowns, the Society of Motor Manufacturers and Traders (SMMT) said.

Car output logged its strongest growth since December 2025, climbing 6.1% to 39,328 units, with exports to Australia, Japan and the US recording the biggest gains among the top 10 markets.

Exports to the EU fell 7.4% in August, though the bloc still took 54.1% of car shipments, remaining the UK's largest overseas market. Shipments to China fell 15%. 

SMMT said that investments of more than £1 billion ($1.32 billion) from companies such as McLaren, Nissan and Bentley serve as a significant indicator of the auto manufacturing sector's long-term prospects.

However, the trade body reiterated concerns about the European Union's proposed "Made in Europe" provisions, calling Britain's exclusion from the policy an "existential threat" to its auto production industry.

"The UK and EU automotive industries are deeply integrated, so effectively excluding British-produced vehicles from their largest market would assure mutual damage," said SMMT Chief Executive Mike Hawes, urging both sides to agree practical fixes to preserve shared competitiveness. 

($1 = 0.7564 pounds)

(Reporting by Simone Lobo in Bengaluru; Editing by Diti Pujara)