The United Kingdom auto parts manufacturing market size is projected to grow at a CAGR of 5.75% between 2025 and 2034. This steady growth reflects the increasing demand for high-quality auto parts, driven by the rise of electric vehicles (EVs), innovations in manufacturing technology, and the country’s robust automotive industry. As the UK car manufacturing sector continues to evolve, the auto parts industry is poised to play a pivotal role in meeting the needs of both traditional internal combustion engine (ICE) vehicles and new-age electric vehicles.

In this blog post, we will explore the key segments, trends, and growth opportunities in the UK auto parts manufacturing market, and how advancements in technology and shifting consumer demands are reshaping this sector.

Market Segmentation: Key Components Driving Growth

The auto parts manufacturing market in the UK can be broken down into several components, each playing a critical role in the automotive ecosystem. These components include batteries, cooling systems, underbody components, engine components, automotive filters, lighting components, electrical components, and chassis systems. Below, we take a closer look at each of these segments.

Battery Components

The battery segment is experiencing substantial growth, largely due to the rapid adoption of electric vehicles. As the UK shifts towards greener mobility solutions, the demand for high-performance batteries, particularly lithium-ion batteries, is on the rise. The increasing focus on reducing carbon emissions has accelerated the production of EVs, which, in turn, has led to a greater demand for batteries. Moreover, advancements in battery technology, such as solid-state batteries, will likely continue to shape this market segment in the coming years.

Cooling Systems

Cooling systems are essential to maintaining optimal engine performance, ensuring that both ICE and electric vehicles run efficiently. As vehicle manufacturers move towards hybrid and electric models, the cooling systems required for these vehicles differ from traditional ICE models. For example, EVs require specialized cooling systems to regulate the temperature of batteries and powertrains. Consequently, the cooling systems market in the UK is expected to witness growth as new technologies emerge, improving the efficiency and longevity of cooling components.

Underbody Components

Underbody components, which include suspension, axles, exhaust systems, and the chassis, are essential for vehicle safety, comfort, and performance. The development of lightweight materials, such as aluminum and composites, has further enhanced the performance of underbody parts. As vehicle designs evolve to improve fuel efficiency and reduce environmental impact, the demand for advanced underbody components will continue to rise. The growth of the electric vehicle market, with its need for lighter, more efficient parts, will also contribute to this segment’s expansion.

Engine Components

Engine components such as pistons, crankshafts, camshafts, and valves remain critical in both ICE and hybrid vehicles. While the transition to electric vehicles reduces the demand for some engine components, hybrid vehicles still require ICE components for the foreseeable future. Additionally, advancements in engine technology that aim to improve fuel efficiency and reduce emissions will fuel growth in the engine components market.

Automotive Filters

Filters play a crucial role in ensuring optimal vehicle performance by preventing contaminants from entering the engine, fuel system, and cabin. This segment includes air filters, fuel filters, oil filters, and cabin filters. As regulations around vehicle emissions become more stringent, the demand for high-performance filters will grow. In particular, hybrid and electric vehicles, which rely on specialized filtration systems, will contribute to the market's expansion.

Lighting Components

Lighting components are integral to vehicle safety, with innovations in LED, OLED, and laser technology becoming more common in modern automobiles. The rise of autonomous vehicles and smart lighting systems, where lights adjust based on vehicle speed and road conditions, is driving growth in this segment. Additionally, the increasing demand for both exterior and interior lighting components in premium vehicles will further contribute to the market's growth.

Electrical Components

The electrical components segment, which includes wiring harnesses, sensors, connectors, and power electronics, is vital in today’s increasingly electronic-driven vehicles. Electric vehicles (EVs) and hybrid electric vehicles (HEVs) require advanced electrical systems for battery management, regenerative braking, and infotainment. With the increasing adoption of autonomous driving and in-car connectivity, the demand for sophisticated electrical components in vehicles is expected to rise significantly, making this a crucial growth area in the UK market.

Chassis System

The chassis system, consisting of suspension, steering, shock absorbers, and braking systems, is essential for vehicle safety and handling. As vehicles become lighter and more fuel-efficient, manufacturers are focusing on developing advanced chassis systems that improve both performance and safety. In particular, electric vehicles (EVs) and hybrid vehicles require specialized chassis systems to support their unique structural needs, creating new opportunities for innovation and growth.

Other Key Components

In addition to the major components outlined above, there are other key auto parts such as tires, fuel tanks, and interior components. These parts are essential to the overall functionality and safety of the vehicle. With increasing vehicle lifespans and the rise of replacement demand, the market for these components is expected to expand as well.

Market Segmentation by Vehicle Type

The UK auto parts manufacturing market is also segmented by vehicle type, which includes passenger vehicles, commercial vehicles, and electric vehicles (EVs). These segments each have their own unique demands for auto parts.

Passenger Vehicles

Passenger vehicles, including sedans, SUVs, and hatchbacks, account for a significant portion of the UK auto parts manufacturing market. As the demand for consumer vehicles continues to rise, so too does the need for components that enhance safety, fuel efficiency, and in-car connectivity. Additionally, the increasing interest in electric and hybrid passenger vehicles is reshaping the types of components required, particularly in areas like batteries, electrical systems, and lightweight materials.

Commercial Vehicles

Commercial vehicles, including trucks, vans, and buses, also contribute heavily to the auto parts manufacturing market. The growth of e-commerce and the rise of logistics and delivery services are driving the demand for commercial vehicles. These vehicles require durable, high-performance components, and as the UK looks to reduce carbon emissions, the adoption of hybrid and electric commercial vehicles is expected to grow, driving the need for specialized components.

Electric Vehicles (EVs)

Electric vehicles represent one of the most significant growth areas in the UK automotive market. The shift towards EVs is driven by stringent emission regulations, government incentives, and growing environmental awareness. EVs require different parts compared to traditional vehicles, especially in areas like battery systems, electric powertrains, and regenerative braking systems. As the UK accelerates its transition to electric mobility, the demand for EV-specific auto parts will continue to soar.

Market Segmentation by Sales Channel

The auto parts manufacturing market in the UK is segmented into Original Equipment Manufacturers (OEM) and Aftermarket sales channels.

Original Equipment Manufacturers (OEM)

OEMs are responsible for providing the original parts that are installed during vehicle production. This segment remains a significant portion of the market as automakers continue to produce large volumes of vehicles. The demand for OEM parts is driven by the growing automotive production and the increasing need for high-quality components in both traditional and electric vehicles.

Aftermarket

The aftermarket segment includes the production and sale of replacement parts and accessories. As vehicles age and require repairs or upgrades, the aftermarket becomes an essential part of the market. This segment is particularly relevant in the context of hybrid and electric vehicles, where demand for replacement parts such as batteries, electrical systems, and filters is rising. Additionally, the growing trend of vehicle customization and enhancement will continue to drive aftermarket sales in the UK.

Regional Analysis

The UK is home to several key automotive manufacturing hubs, including regions in the Midlands, the North, and the South. These areas are seeing increasing investment in automotive production, especially in the context of electric vehicle manufacturing.

Southern UK

• Includes automotive hubs like Bristol and Oxford.
• Focus on advanced manufacturing technologies and R&D, particularly for electric vehicle production.

Northern UK

• Areas like Manchester and Leeds are seeing growth in automotive manufacturing and innovation.
• Northern regions are becoming increasingly important as the UK looks to expand EV production.

London

• London serves as the hub for automotive finance, innovation, and research.

Competitive Landscape

The UK auto parts manufacturing market is competitive, with a range of key players such as Jaguar Land Rover, Bentley Motors, Magna International, Valeo, Bosch, and GKN Automotive. Companies are investing heavily in R&D to meet the changing needs of the market, especially in the areas of electric vehicle production and supply chain efficiency.