UK auto output rises in May for first time this year as US exports grow, SMMT says

June 25 (Reuters) - A rise in shipments to the U.S. drove up UK's vehicle production in May, with output rising 2.7% from a year earlier, snapping four months of decline, the Society of Motor Manufacturers and Traders said on Thursday.

However, the auto trade body warned that high energy costs, trade risks, and weak demand for electric vehicles continue to threaten competitiveness. 

"Manufacturers are investing billions in zero emission technology, but weak underlying demand and the growing cost of compliance are putting competitiveness, jobs and future investment at risk," SMMT CEO Mike Hawes said.

Vehicle output in May rose to 51,178 units, SMMT said, with car production up 3.2% year-on-year at 49,249 and commercial vehicle production down 7.6% from a year earlier at 1,929.

Shipments to the United States rose 83.1% last month, while exports to the EU and China fell 5.2% and 14.3%, respectively. 

In the first five months, total vehicle output fell 8.7% to 317,779 units.

SMMT warned that the European Union's "Made in EU" proposal and stricter rules of origin under the post-Brexit trade deal from 2027 risk curbing access for UK-made vehicles to the bloc's market, while the Middle East conflict threatens to drive energy costs even higher.

The European Union remains Britain's largest export market for vehicles.

The SMMT and carmakers have called for clarity on whether UK-built vehicles would be excluded from the latest "Made in EU" proposal while warning that uncertainty could weigh on investment as competition from low-cost Chinese EVs intensifies. 

($1 = €0.8828)

(Reporting by Nithyashree R B in Bengaluru)