LONDON, April 30 (Xinhua) -- Britain's automotive industry has urged the government to step up engagement with the European Union (EU) on sector-specific issues, as vehicle production continues to decline amid weakening exports and rising policy uncertainty.

UK vehicle output fell by 8.2 percent year on year to 72,511 units in March, according to data released on Thursday by the Society of Motor Manufacturers and Traders (SMMT).

Of the total, car production stood at 69,755 units, down 0.8 percent, while commercial vehicle (CV) output dropped sharply by 68.3 percent to 2,756 units, reflecting ongoing restructuring in the segment.

Exports remained the dominant share of production but continued to weaken. Of all vehicles produced in March, 70.3 percent were built for overseas markets. However, export volumes declined on a yearly basis, with car exports falling by 4.3 percent to 49,339 units and CV exports dropping by 54.0 percent to 1,602 units.

The EU remained the UK's largest export destination, accounting for 62.6 percent of car exports and 91.6 percent of CV exports. Demand from the bloc showed relative resilience, with UK-built car exports to the EU rising by 4.8 percent year on year, marking the fourth consecutive month of growth.

However, the industry warned that broader global demand remains under pressure, while evolving policy frameworks in both the UK and the EU are adding to uncertainty.

In particular, the sector voiced concern over the EU's proposed Industrial Accelerator Act and related "Made in Europe" policies, which are designed to strengthen regional manufacturing by prioritizing locally produced goods through stricter local content requirements, subsidies and procurement rules.

The SMMT said that, as currently designed, such measures risk excluding UK-built vehicles, parts and batteries from segments of the European market, potentially undermining the competitiveness of British manufacturers.

In addition, UK manufacturers are facing the prospect of new tariffs on electric vehicles and batteries from 2027, when stricter rules of origin under the UK-EU Trade and Cooperation Agreement are set to take effect.

Given the deep integration of EU-UK automotive supply chains, with bilateral trade worth around 80 billion euros (93.6 billion U.S. dollars)annually, the industry is calling for urgent amendments to ensure the UK is treated as a trusted partner under the framework.

Against this backdrop, the industry is urging both sides to use the forthcoming EU-UK summit to address automotive trade issues and seek pragmatic solutions to maintain market access and support industrial stability.

Mike Hawes, chief executive of the SMMT, said: "We must ensure that 'Made in Europe' proposals do not exclude the UK, given how integrated our industries are. The UK and EU need to work together to avoid new barriers - including the looming risk of tariffs under stricter rules of origin - and secure a positive outcome for manufacturers, economies and consumers on both sides." ■