Automotive industry demand forecast figures released by the Advanced Propulsion Centre UK (APC) today, 29 September 2026, indicate that whilst global vehicle production remains broadly stable, the market is becoming more competitive.
The Q2 2026 Automotive Industry Demand Forecast indicates that electric vehicles (EVs) continue to gain share despite weaker growth in China and the US, while rising vehicle production in emerging markets and the increasing expansion of lower-cost Chinese manufacturing are expected to intensify competitive pressure on established automotive markets.
Dr Hadi Mozterzadeh, Head of Technology Trends, APC said:
“The long-term outlook for UK automotive production remains positive, supported by growing demand for zero emission vehicles. However, achieving the UK’s ambition of producing 1.3 million vehicles annually by 2035 will require more than market growth alone. It calls for a strategic reset across the sector, including securing new model allocations, attracting investment, and strengthening the competitiveness of the UK automotive and advanced manufacturing supply chain.
Alongside building domestic capability in electrification technologies such as batteries, electric motors and drive systems, the UK must also accelerate investment in the upstream supply chain, particularly refining and processing capacity for critical minerals, which underpin a resilient and secure zero-emission vehicle ecosystem.
The implementation of Rules of Origin requirements presents both a challenge and an opportunity. There is only a limited window for the UK and Europe to establish the battery and component supply chains needed to meet localisation requirements and maintain competitiveness. At the same time, industry and policymakers must continue engaging with the European counterparts to explore pragmatic options that support the transition while safeguarding investment and trade. Ultimately, a successful ‘Made in Europe’ strategy must include both the UK and the EU, working together to build a globally competitive automotive value chain that can secure future manufacturing, jobs and investment on both sides of the Channel.”
Read the Q2 2026 Automotive Industry Demand Forecast report here.
You can find previous Automotive Industry Demand Forecast reports here.
